Q1) A 10-year annual coupon bond has a coupon rate of 5%. What is the price of the bond if the market interest rate is 5.5%?

a. $386.09

b. $1,000

c. $1,500

d. $962.31

Q2) The value of an investment in shares of Air Canada at the end of the second year was $115,500. The returns during the first and second year were 10% and 5%, respectively. What is the value of the initial investment?

a. $99,945.91

b. $100,000

c. $100,434.78

d. None of the THESE

e. $107,441.86

Q3) Which of the following statements is true?

a. All of THESE

b. An indenture is a written agreement between a borrower and lender establishing the terms of a loan.

c. A protective covenant is, for example, the collateral on a bonds issue to back up the loan.

d. The yields on preferred shares are usually lower than those from bonds.

Q4) The returns on the stock of COSTA Corp. over the last 4 years are as follows: 2016: +10%, 2017: -8%, 2018: +12%, and 2019: -5%. What was the realized annual return?

a. +4.29%

b. +1.87%

c. -1.57%

d. None of THESE

e. +2.25%