Surf City Software Company develops new surf forecasting software. It sells the software to Microsoft in exchange for 1000 shares of Microsoft common stock. Surf City Software has exchanged a _____ asset for a _____ asset in this transaction.
A) real, real
B) financial, financial
C) real, financial
D) financial, real
Answer: C
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FIN 332
- A coupon bond which pays interest of $50 annually, has a par value of $1,000, matures in 5 years, and is selling today at an $84.52 discount from par value. The current yield on this bond is __________.
- An investor pays $989.40 for a bond. The bond has an annual coupon rate of 4.8%. What is the current yield on this bond?
- The yield to maturity of an 8-year zero coupon bond, with a par value of $1,000 and a market price of $623.20, is ______.
- Consider the expectations theory of the term structure of interest rates. If the yield curve is downward sloping, this indicates that investors expect interest rates to __________ in the future.
- The bonds of Elbow Grease Dishwashing Company have received a rating of "D" by Moody's. The "D" rating indicates __________.
- Under the pure expectations hypothesis, an upward sloping yield curve would indicate ________
- Consider a 7-year bond with a 9% coupon and a present yield to maturity of 12%. If interest rates remain constant, one year from now the price of this bond will be __________.
- Analysis of bond returns over a multiyear horizon, based on forecasts of the bond's yield to maturity and reinvestment rate of coupons is called ___.
- A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000. If the bond matures in 16 years, it should sell for a price of __________ today based on annual compound.
- A bond with a 10% coupon, 10 years to maturity and a market price of 95 % of par has a yield to maturity of __________, assuming annual compound.
- A coupon bond which pays interest annually, has a par value of $1,000, matures in 5 years and has a yield to maturity of 12%. If the coupon rate is 9%, the present value of the bond today should be __________.
- A callable bond pays annual interest of $60, has a par value of $1,000, matures in 20 years but is callable in 10 years at a price of $1,100, and has a value today of $1055.84. The yield to call on this bond is __________.
- A coupon bond which pays interest of $40 annually, has a par value of $1,000, matures in 5 years, and is selling today at a $159.71 discount from par value. The actual yield to maturity on this bond is __________.
- The average annual return of holding the bond until it is callable is called ___.
- A debenture is __________.
- A mortgage bond is ________.
- The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of .8 to offer a rate of return of 12 percent, then you should __________.
- You invest $600 in security A with a beta of 1.5 and $400 in security B with a beta of .90. The beta of this formed portfolio is __________.
- Security X has an actual return of 13% and a beta of 1.15. The risk-free rate is 5% and the market expected rate of return is 15%. According to the capital asset pricing model, security X is __________.
- According to the capital asset pricing model, __________.
- According to the capital asset pricing model, a well-diversified portfolio's rate of return is a function of __________.
- In a well diversified portfolio, __________ risk is negligible.
- The market portfolio has a beta of __________.
- In the context of the capital asset pricing model, the systematic measure of risk is __________.
- Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a beta of 1.2 is 20%. What is the risk-free rate?
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.