Financial Management FIN 3150 Exam |
Questions and Correct answers
A bond has the following interest rate elements used. r+r*+IP. What type of bond is it?
US Government Long-Term
AA Corporate
US Government Short-Term
AAA Corporate - Ans US Government Short-Term
The general trend in the Fed's target interest rate since 1980 has been _______.
downward
upward
mostly flat
all over the place - Ans downward
In general, the US Government bond yield has been _______ than the Fed's target rate since
1980?
higher
about the same
flat
lower - Ans higher
In anticipation of a pending recession, the US Federal Reserve has, since 1980, _________ its
target interest rate.
,lowered
raised
kept flat
gradually raised - Ans lowered
If an issuer includes a call option as part of its bond indenture, the issuer likely expects
market interest rates to _________ fall in the foreseeable future.
Remain unchanged
Fall
Rise
Be volatile - Ans Fall
A common financing approach that enables private equity firms to purchase a target company
is _________.
mezzanine financing
leveraged buy out
angel financing
initial public offering - Ans leveraged buy out
If a firm is unable to pay its bill but thinks their business model is viable if given another change,
it may declare __________ bankruptcy.
Mosiah Chapter 3
Chapter 7
Chapter 2
Chapter 11 - Ans Chapter 11
When calculating the value of a callable bond, the future value should be __________.
call maturity value
, call face value
call par value
call price - Ans Call price
A bond without any embedded options is called a __________ bond.
pepper
chocolate chip
vanilla
mustard - Ans vanilla
The Federal Reserve has a dual mandate. Which element is not part of this mandate.
none of the above
full employment
low inflation
corporate solvency - Ans corporate solvency
Which of the terms below is an expression of the "term structure of interest rates".
bond liquidity ratio
yield curve
yield structure flow
futures curve - Ans yield curve
An inverted yield curve is a sign of ___________.
expansion
silliness
full employment
recession - Ans recession
Questions and Correct answers
A bond has the following interest rate elements used. r+r*+IP. What type of bond is it?
US Government Long-Term
AA Corporate
US Government Short-Term
AAA Corporate - Ans US Government Short-Term
The general trend in the Fed's target interest rate since 1980 has been _______.
downward
upward
mostly flat
all over the place - Ans downward
In general, the US Government bond yield has been _______ than the Fed's target rate since
1980?
higher
about the same
flat
lower - Ans higher
In anticipation of a pending recession, the US Federal Reserve has, since 1980, _________ its
target interest rate.
,lowered
raised
kept flat
gradually raised - Ans lowered
If an issuer includes a call option as part of its bond indenture, the issuer likely expects
market interest rates to _________ fall in the foreseeable future.
Remain unchanged
Fall
Rise
Be volatile - Ans Fall
A common financing approach that enables private equity firms to purchase a target company
is _________.
mezzanine financing
leveraged buy out
angel financing
initial public offering - Ans leveraged buy out
If a firm is unable to pay its bill but thinks their business model is viable if given another change,
it may declare __________ bankruptcy.
Mosiah Chapter 3
Chapter 7
Chapter 2
Chapter 11 - Ans Chapter 11
When calculating the value of a callable bond, the future value should be __________.
call maturity value
, call face value
call par value
call price - Ans Call price
A bond without any embedded options is called a __________ bond.
pepper
chocolate chip
vanilla
mustard - Ans vanilla
The Federal Reserve has a dual mandate. Which element is not part of this mandate.
none of the above
full employment
low inflation
corporate solvency - Ans corporate solvency
Which of the terms below is an expression of the "term structure of interest rates".
bond liquidity ratio
yield curve
yield structure flow
futures curve - Ans yield curve
An inverted yield curve is a sign of ___________.
expansion
silliness
full employment
recession - Ans recession
