Financial Markets and Institutions uark
exam 2 questions and answers
5% interest rate to 8% is a - - correct answer ✅discount
5% interest rate to 2% is a - - correct answer ✅premium
Most money market securities sell at a - - correct answer
✅Discount
Price Volitility formula - - correct answer ✅new price- old price/
old price x100
Lower coupon rate= ___________ price volatility - - correct answer
✅greater
Lower coupon bonds have a _______ interest rate - - correct
answer ✅greater
longer maturity= ___________ price volitility - - correct answer
✅greater
higher Interest Rates= _______ price volatility - - correct answer
✅lesser
, Financial Markets and Institutions uark
exam 2 questions and answers
interest rates increase, FV ______ - - correct answer ✅increases
interest rates decrease, FV _______ - - correct answer ✅decreases
lower coupon bonds have _______ interest rate risk - - correct
answer ✅greater
interest rates expected to increase, yield curve _______ - - correct
answer ✅upward sloping
interest rates expected to decrease, yield curve _______ - - correct
answer ✅downward sloping
Greater interest rate uncertainty, _______ liquidity premium - -
correct answer ✅greater
Tax exempt securities have _______ market yields - - correct answer
✅lower
More marketability, _______ yield - - correct answer ✅lower
exam 2 questions and answers
5% interest rate to 8% is a - - correct answer ✅discount
5% interest rate to 2% is a - - correct answer ✅premium
Most money market securities sell at a - - correct answer
✅Discount
Price Volitility formula - - correct answer ✅new price- old price/
old price x100
Lower coupon rate= ___________ price volatility - - correct answer
✅greater
Lower coupon bonds have a _______ interest rate - - correct
answer ✅greater
longer maturity= ___________ price volitility - - correct answer
✅greater
higher Interest Rates= _______ price volatility - - correct answer
✅lesser
, Financial Markets and Institutions uark
exam 2 questions and answers
interest rates increase, FV ______ - - correct answer ✅increases
interest rates decrease, FV _______ - - correct answer ✅decreases
lower coupon bonds have _______ interest rate risk - - correct
answer ✅greater
interest rates expected to increase, yield curve _______ - - correct
answer ✅upward sloping
interest rates expected to decrease, yield curve _______ - - correct
answer ✅downward sloping
Greater interest rate uncertainty, _______ liquidity premium - -
correct answer ✅greater
Tax exempt securities have _______ market yields - - correct answer
✅lower
More marketability, _______ yield - - correct answer ✅lower
