FIN 380-Exam 2-Meek QUESTIONS WITH
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ANSWERS
a bond w several years to maturity has a coupon rate that is less
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than its YTM. The bond will - CORRECT ANSWERS ✔✔have a
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price lower than its par value
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The risk that bond issuer might not make the promised coupon
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and for par value PMTs is referred to as: - CORRECT ANSWERS
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✔✔default risk |\
If currrent stock prices reflect only past prices and past returns,
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then the market is: - CORRECT ANSWERS ✔✔weak form efficient
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Granting someone the rifht to vote your shares is referred to as: -
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CORRECT ANSWERS ✔✔Proxy
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_______ faciliate secondary mkt transaction (bring buyers and
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sellers together) + earn a commission or charge a fee - CORRECT
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ANSWERS ✔✔Brokers
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The issuing firm has the option to repurchase the preferred stock
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at a set price if it is: - CORRECT ANSWERS ✔✔callable preferred
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We prefer a low WACC to a high WACC - CORRECT ANSWERS
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✔✔True
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ANSWERS
a bond w several years to maturity has a coupon rate that is less
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
than its YTM. The bond will - CORRECT ANSWERS ✔✔have a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
price lower than its par value
|\ |\ |\ |\ |\
The risk that bond issuer might not make the promised coupon
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and for par value PMTs is referred to as: - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔default risk |\
If currrent stock prices reflect only past prices and past returns,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
then the market is: - CORRECT ANSWERS ✔✔weak form efficient
|\ |\ |\ |\ |\ |\ |\ |\ |\
Granting someone the rifht to vote your shares is referred to as: -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Proxy
|\ |\ |\
_______ faciliate secondary mkt transaction (bring buyers and
|\ |\ |\ |\ |\ |\ |\ |\
sellers together) + earn a commission or charge a fee - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Brokers
|\ |\
The issuing firm has the option to repurchase the preferred stock
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
at a set price if it is: - CORRECT ANSWERS ✔✔callable preferred
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
We prefer a low WACC to a high WACC - CORRECT ANSWERS
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✔✔True