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Sophia
Principles of Finance
Milestone 2
1
Select the best definition of an ordinary annuity.
An annuity whose payments can be made at any point during the period
An annuity whose payments are made at the beginning of the period
An annuity whose payments are made at the end of the period
An annuity that makes payments forever
CONCEPT
Annuities
2
Bill wants to buy a bond whose face value is substantially higher than its market price.
What kind of bond should he buy?
Inflation-linked
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Asset-backed
Zero-coupon
Government
CONCEPT
Types of Bonds
3
Which of the following is a disadvantage of bonds for a potential investor?
They have less legal protection than stocks.
Bondholders risk a significant price drop if a large number of bonds are sold at once.
Some bonds can be redeemed early by the issuer.
They are more likely than stocks to end up valueless if a company goes bankrupt.
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Sophia
Principles of Finance
Milestone 2
1
Select the best definition of an ordinary annuity.
An annuity whose payments can be made at any point during the period
An annuity whose payments are made at the beginning of the period
An annuity whose payments are made at the end of the period
An annuity that makes payments forever
CONCEPT
Annuities
2
Bill wants to buy a bond whose face value is substantially higher than its market price.
What kind of bond should he buy?
Inflation-linked
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
Asset-backed
Zero-coupon
Government
CONCEPT
Types of Bonds
3
Which of the following is a disadvantage of bonds for a potential investor?
They have less legal protection than stocks.
Bondholders risk a significant price drop if a large number of bonds are sold at once.
Some bonds can be redeemed early by the issuer.
They are more likely than stocks to end up valueless if a company goes bankrupt.
Downloaded by: Ariah |
Distribution of this document is illegal
