BUS 401 – Week 2 - Quiz

BUS 401 – Week 2 - Quiz Question : The payment structure of a corporate bond is best thought of as: Student Answer: an annuity of interest payments. an annuity of principal and interest payments. an annuity of principal payments. an annuity of interest payments and a single principal payment at maturity. Instructor Explanation: The answer can be found in Section 5.2: Bonds. Points Received: 1 of 1 Comments: Question 2.Question : Suppose a zero-coupon bond is selling for $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. Its annual rate of return would be about ____. Student Answer: 4% 5% 6% 7% Instructor Explanation: The answer can be found in Section 5.2: Bonds. Points Received: 1 of 1 Comments: Question 3.Question : Common stock that pays cash dividends can be viewed as: Student Answer: an annuity—regularly spaced payments of the same dollar amount for a fixed number of periods. a perpetuity—regularly spaced payments of the same dollar amount that continue indefinitely.