Municipal bonds:

Question 3 options:

1)	are issued by federal, state, or local governmental bodies.

2)	are risk-free.

3)	generally have the term to maturity less than one year

4)	are zero coupon bonds.

5)	must be purchased by individual investors.

Which one of the following statements is true?

Question 4 options:

1)	A premium bond has a yield to maturity that is less than the bond's coupon rate.

2)	The current yield on a premium bond is equal to the bond's coupon rate.

3)	A discount bond has a coupon rate that is higher than the bond's yield to maturity.

4)	The yield to maturity on a premium bond exceeds the bond's coupon rate.

5)	The current yield on a par value bond will exceed the bond's yield to maturity.

Interest rates always increase as the length of time until repayment increases.

Question 7 options:

	True
	False

Two years ago you bought a bond with a 5% coupon that matures ten years from now. Today the interest rate on similar bonds is 10%. This bond sells at

Question 8 options:

A)

a premium

B)	a discount

C)	its par value

Donuts Delite just paid an annual dividend of $1.10 a share. The firm expects to increase this dividend by 8 percent per year the following three years and then decrease the dividend growth to 2 percent annually thereafter. Which one of the following is the correct computation of the dividend for year 5?

Question 11 options:

1)	($1.10) (1.08 3) (1.02 3)

2)	($1.10) (1.08)3 (1.02)4

3)	($1.10) (1.08 3) (1.02 4)

4)	($1.10) (1.08)3 (1.02)2

5)	($1.10) (1.08)3 (1.02)3

Question 15:

An investor purchased a stock for $42.98 and sold it one year later for $46.17. The investor also received a dividend payment of $0.13. What was the investor's realized capital gain rate? (Enter your answer as a decimal rounded to 4 decimal places, not a percentage. For example, enter .0153 instead of 1.53%.)