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FIN 390 WEEK 7 INVESTMENTS BACKGROUND AND ISSUES

https://www.coursetutor.us/product/fin-390-week-8-final-exam-devry/<br><br>FIN 390 WEEK 8 FINAL EXAM DEVRY<br>Question 110 pts<br>(TCO 1) Which of the following is true about fixed-income securities?<br>They are usually found on the income statement.<br>

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FIN 390 WEEK 7 INVESTMENTS BACKGROUND AND ISSUES

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  1. FIN 390 WEEK 8 FINAL EXAM DEVRY https://www.coursetutor.us/product/fin-390-week-8-final-exam-devry/ Or Email us on help@coursetutor.us FIN 390 WEEK 8 FINAL EXAM DEVRY Question 110 pts (TCO 1) Which of the following is true about fixed-income securities? They are usually found on the income statement. They are always found on the left side of the balance sheet. They are usually shown on the right side of the balance sheet. None of the above Question 210 pts

  2. (TCO 2) The concept of risk versus return refers to the consideration of an investor’s portfolio weights being equal between risk-free and risky assets. the fact that the yield curve is flat. the fact that all investors expect less return for increasing amounts of risk. None of the above Question 310 pts (TCO 5) Which of the following is not true? YTM is always higher than the coupon rate. Coupon rate will always exceed the dividend yield. YTM is primarily of interest to investment bankers. All of the above

  3. Question 410 pts (TCO 3) Which of the following are or could be part of the buying, selling, and trading of corporate bonds? IPO process and shelf registration Auction markets and dealer markets Investment bankers All of the above Question 510 pts (TCO 5) What is the normal yield curve shape? Humped in the middle Downward sloping to the right Upward sloping to the right

  4. None of the above (TCO 6) Portfolio diversification is all about which of the following? Maximizing the investor’s return Minimizing the risk to the investor Maximizing the return per unit of risk to the investor None of the above Question 710 pts (TCOs 1 and 8) What kind of securities would investors seeking a steady income probably look to? Common stock, Treasury bills, and corporate bonds Preferred stock, Treasury bonds, and corporate bonds

  5. Corporate bonds rated “bbb” only None of the above Question 810 pts (TCO 8) Who would normally be required to create a portfolio investment policy? Pension fund managers 401k plan administrators Large insurance companies All of the above (TCO 4) Where could you find trend information about the bond market? Dow Jones Average

  6. NASDAQ S&P 500 None of the above Question 1010 pts (TCO 6) The yield on a corporate bond is 10%, and it is currently selling at par. The marginal tax rate is 20%. A par value municipal bond with a coupon rate of 8.50% is available. Which security is a better buy? Municipal bond Both are equal Corporate bond A municipal bond carries no par Question 1120 pts

  7. (TCO 6) What is the coupon rate needed on a $1,000 face value, 6% coupon corporate bond to make it equivalent in terms of return to one whose interest rate is tax free? Assume the corporate tax rate is 40%. Question 1220 pts (TCO 7) What would be the expected change to a 30-year bond’s market price or value if its YTM increases to 9.4%? Its YTM is now 9%, it has an 8% annual coupon, $1,000 face value, it is currently priced at $897.26, and its duration is 8 years. Question 1320 pts (TCO 2) Given the data below, calculate the expected return, variance, and standard deviation of the following company. In a recessionary economy, which is expected to occur with a 30% probability, the expected returns would be -5%. In an expanding economy with an expected probability of occurrence of 20%, the expected return would be 20%. In a normal economy, expected to occur 50% of the time, the expected return would be 5%. Question 1420 pts (TCO 6) Calculate the five ratios for the following company info. Income Statement Balance Sheet Revenue 10,000 Assets Liab. + OE EBIT $2,000 cash $1,000 a/p $2,000 Interest $500 A/R $10,000 Bonds payable $50,000 Earnings B4 Tax $1,500 Equip $25,000 equity $84,000 EAT (at 30%) $1,050 Bldg $100,000

  8. Total $136,000 $136,000 – return on sales – ROA – ROE – fixed asset turnover – times interest earned Question 1520 pts (TCOs 1, 5, and 6) Calculate the appropriate selling price of a 30-year 5% coupon, $10,000 Treasury bond that was purchased 5 years ago. Marketplace interest rates are averaging 8%. Question 1620 pts (TCOs 1, 8, and 9) An investor is looking to buy a bond that currently pays $155 a year in interest (coupon rate). The current yield is 11%, and the face value is $1,000. How much will the investor have to pay for this bond? Question 1730 pts (TCO 5) Explain the difference between active portfolio management and passive management. Download Now

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