Write the correct answer of the MC questions in the space provided. Show all work on quantitative problems. Respond in complete sentences wherever a written response is required. Multiple choice: 2 pts each 1. Armini Corporaton's 8% coupon bonds are trading at 102.5. Which of the following statements is/are true? a. The bonds are trading at a discount, indicating that the YTM is below 8%. b. The bonds are trading at a discount, indicating that the YTM is above 8%. c. The bonds are trading at a premium, indicating that the YTM is below 8%. d. The bonds are trading at a premium, indicating that the YTM is above 8%. None of these is correct given the information provided. 2. As interest rates rise, bond values , with short-term bonds reacting dramatically to the rate increase than long-term bonds. a. rise; more b. rise; less c, fall; more d. fall; less e. two of the above 3. Preferred stock differs from common stock in that a. preferred stock usually has a maturity date. b. preferred stock dividends typically change from year to year. c. preferred stock has a lower priority claim on income and assets than common stock. d. preferred stock dividends are fixed. e. All of these are correct. 4. A "call provision" on a bond a. gives the investor in bonds the right to purchase additional bonds at a known price within a specified time period. b. gives the investor in bonds the right to sell those bonds at a known price within a specified time period. c. gives the issuer of a bond the right to retire those bonds at a known price prior to maturity. d. gives the issuer of a bond the right to issue (sell) additional bonds at a known price within a specified time period. e. Hah! Call features concern stock issues, not bond issues, so none of the above is correct. 5. From an investor's standpoint, which of the following properly ranks these securities in order of risk, from greatest to least? a. Bonds, Preferred Stock, Common Stock b. Preferred Stock, Common Stock, Bonds c. Common Stock, Bonds, Preferred Stock d. Bonds, Common Stock, Preferred Stock e. Common Stock, Preferred Stock, Bonds 6. An arrangement whereby a company sets aside money to retire debt prior to maturity is termed a a. sinking fund b. call provision c. retirement fund d. deed of trust fund