Question 10

1. Which is better to own during a period of declining interest rates in terms of reinvestment rate risk?

a. a zero coupon bond

b. a bond with a 13% coupon

c. a bond with a variable interest rate

d. a municipal bond

Question 11

1. When receiving a 10% stock dividend, the owner of 427 shares of stock will receive

a. 4.27 shares.

b. 42.7 shares.

c. 43 shares.

d. 42 shares plus cash