On Wednesday, November 2, 2022, the Federal Reserve raised the interest rate to fight the inflation in the economy. Market interest rate increases consequently. As an investor of Microsoft 2.625% bond (stated annual coupon rate of 2.625%), you’ve kept a close eye on the movement of the market interest rate. Which of the following observations is correct, if everything else is unchanged?

The annual coupon payment increases

The bond price expected to increase

The bond’s term to maturity will be extended.

The current yield of the bond increases.

You decide to invest your savings in the stock market. After doing some research, you’ve invested a total amount of $97,500 in two stocks, AT&T and Blogen. At&T stock is valued at $84.650 in your portfolio and has an expected return of 10.6%. The rest of the savings invests in Biogen stock that has an expected return of 6.4%. What is the expected return of your portfolio?

8.50%

8.48%

10.05%

6.95%

The Coca-Cola company just paid out cash dividends of $0.57 per share for the common stock shareholders in the first quarter of 2022. Which one of the following regarding dividends is correct?

Coca-Cola’s bondholders and preferred stockholders are also entitled to dividends.

Coca-Cola’s dividend payment is approved by its board of directors

Coca-Cola can treat dividends as tax-deductible expense

If Coca-Cola falls to pay dividends in the rest quarters of 2022, it is considered an event of default

In a recent Interview, Warrant Buffett commented on Berkshire Hathaway’s investment in Occidental Petroleum Corp’s preferred stock, specifically on its high dividends yield. Occidental Petroleum offers preferred stock which is referred to as 10-10 stock, meaning that this stock will pay a dividend yield of 10% on a par value of $100 per share starting 10 years from now. What is this stock worth preferred stock shareholders today if they require a rate of return of 6.25%

$92.72

$87.26

$160.00

$82.13

Your portfolio is composed of 800 shares of Stock X, 3500 shares of Stock Y, and 1400 shares of stock Z. Stock X has a beta of 0.25 and a price of $13.77 per share. Stock Y has a beta of 0.93 and a price of $60.07 per share. Stock Z has a beta of 2.01 and a price of $29.25 per share. What is the portfolio beta?

1.05

1.10

1.06

1.07

2.07