Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hello, please help with answers for the questions attached as soon as possible. Thank you. FNB 100 Assessment 1. Bond prices are quoted in terms
Hello, please help with answers for the questions attached as soon as possible. Thank you.
FNB 100 Assessment 1. Bond prices are quoted in terms of which of the following? A. % of par value B. coupon rate in C. market rate in dollars dollars D. original issue discount 2. Which of these statements is true? A. When people purchase a stock, they know the ST return, but not the LT return. B. Many people purchase stocks as they find comfort in the certainty for this safe form of investing. C. When people purchase a stock, they know exactly what their dollar and % return are going to be. D. When people purchase a stock, they do not know what their return is going to be - either ST or in the long run. 3. This is defined as the portion of total risk that is attributable to firm or industry factors and can be reduced through diversification. A. market risk B. modern C. total risk D. firm-specific portfolio risk risk 4. Which of the following statements is true? A. Interest payments paid to municipal bond holders are not taxed at the federal level, or by the state for which the bond is issued. B. Interest payments paid to corporate bond holders are not taxed at the state level. C. Interest payments paid to corporate bond holders are not taxed at the federal level. D. Interest payments paid to U.S. Treasury bond holders are not taxed at the federal level. 5. Which of the following is NOT a factor that determines the coupon rate of a company's bonds? A. The amount of uncertainty about whether the company will be able to make all the payments. B. The term of the loan. C. All of these are factors that determine the coupon rate of a company's bonds. D. The level of interest rates in the overall economy at the time. 6. Which of the following terms means that during periods when interest rates change substantially, bondholders experience distinct gains and losses in their bond investments? A. interest rate B. credit quality C. liquidity rate D. reinvestment risk risk risk rate risk 7. This index tracks 500 companies which allows for a great deal of diversification. A. S&P 500 B. Nasdaq C. Fortune 500 D. Wall Street Journal 8. Which of the following is an important advantage to the issuer of a bond with a call provision? A. They are able to avoid interest rate risk. B. They allow for refinancing opportunities. C. They are able to reduce their credit risk. D. They are able to avoid reinvestment rate risk. 9. This is a measurement of the co-movement btwn two variables that ranges between -1& +1. A. STDEV B. total risk C. CoV D. correlation 1 FNB 100 Assessment 10. To compensate the bondholders for getting the bond called, the issuer pays which of the following? A. coupon rate C. call premium B. original issue premium D. call feature 11. Which of the following is a debt security whose payments originate from other loans, such as credit card debt, auto loans, and home equity loans? A. debentures C. credit quality securities B. junk bonds D. asset-backed securities 12. This is the term for portfolios with the highest return possible for each risk level. A. modern B. optimal C. total portfolios D. efficient portfolios portfolios portfolios 13. This is the portion of total risk that is attributable to overall economic factors. A. market risk B. firm-specific C. modern D. total risk risk portfolio risk 14. Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul has an AVG return of 12 % and STDEV of 25 %. The AVG return and STDEV of Idol Staff are 15 % and 35 %; and of Poker-R-Us are 9 % and 20 %. Rank Stock 1 2 3 15. Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an AVG return of 12 % and STDEV of 25 %. The AVG return and STDEV of Idol Staff are 15 % and 35 %; and of Poker-R-Us are 9 % and 20 %. Rank Stock 1 2 3 16. A corporate bond that you own at the beginning of the year is worth $975. During the year, it pays $45 in interest payments and ends the year valued at $965. What was your dollar return and % return? (Round your "% return" to 2 decimal places.) Dollar return % return 17. Consider the following three bond quotes: a Treasury note quoted at 97:27, a corporate bond quoted at 103.25, and a municipal bond quoted at 101.90. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? 2 FNB 100 Assessment (Do not round intermediate calculations and round your final answers to 2 decimal places.) Treasury note Corporate bond Municipal bond 18. At the beginning of the month, you owned $6,000 of News Corp, $5,000 of First Data, and $8,500 of Whirlpool. The monthly returns for News Corp, First Data, and Whirlpool were 8.24 %, - 2.59 %, and 10.13 %. What's your portfolio return? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Portfolio return 19.1. Calculate the price of a 5.2 % coupon bond with 18 years left to maturity and a market interest rate of 4.6 %. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.) Bond price 19.2. Is this a discount or premium bond? A. Discount bond B. Premium bond 20. You have $15,000 to invest. You want to purchase shares of Alaska Air at $42.88, Best Buy at $51.32, and Ford Motor at $8.51. How many shares of each company should you purchase so that your portfolio consists of 30 % Alaska Air, 40 % Best Buy, and 30 % Ford Motor? (Do not round intermediate calculations and round your final answers to the nearest whole number.) Alaska air Best buy Ford motor 21. The past five monthly returns for Kohls are 3.54 %, 3.62 %, - 1.68 %, 9.25 %, and - 2.56 %. What is the AVG monthly return? (Round your answer to 3 decimal places.) AVG return 22. Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 4.5 %. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Zero coupon bond price 23. Calculate the CoV of the risk-return relationship of the bond market (Use the Tables below) during each decade since 1950. (Round your answers to 2 decimal places.) 3 FNB 100 Assessment Table 23.1 AVG Returns for Bonds Decade LT Treasury Bonds 1950 to 1959 0.0% 1960 to 1969 1.6 1970 to 1979 5.7 1980 to 1989 13.5 1990 to 1999 9.5 2000 to 2009 8.0 Decade 1950s 1960s 1970s 1980s 1990s 2000s Table 23.2 Annual STDEV for Bonds Decade LT Treasury Bonds 1950 to 1959 4.9% 1960 to 1969 6.2 1970 to 1979 6.8 1980 to 1989 15.1 1990 to 1999 12.8 2000 to 2009 10.3 CoV 24.1. Calculate the price of a 5.7 % coupon bond with 22 years left to maturity and a market interest rate of 6.5 %. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.) Bond price 24.2. Is this a discount or premium bond? A. Premium bond B. Discount bond 25. FedEx Corp stock ended the previous year at $103.39 per share. It paid a $0.35 per share dividend last year. It ended last year at $106.69. If you owned 300 shares of FedEx, what was your dollar return and % return? (Round your % return answer to 2 decimal places.) Dollar return % return * Each problem = 4 points. * Each subordinate problem = 4 points / # of subordinate problems 4Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started