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FI 302 Exam 2- Whaley Exam with
complete solutions latest version
A bond is a ___ instrument by which a borrower of funds agrees to pay back the funds
with specific dates in the future. - CORRECT ANSWER-Long-term debt
The appropriate rate to use to discount the cash flows of a bond in order to determine
the current price is the ____. - CORRECT ANSWER-Yield to maturity
Trials Inc. has issued 30-year $1000 face value, 10% annual coupon bonds, with a yield
to maturity of 9.0%. The annual interest payment for the bond is ____. - CORRECT
ANSWER-$100
The ____ is the regular interest payment of the bond. - CORRECT ANSWER-Coupon
The ___ is the expiration date of the bond. - CORRECT ANSWER-Maturity date
The _____ is the interest rate printed on the bond. - CORRECT ANSWER-Coupon rate
"Junk" bonds are a street name for ____ grade bonds. - CORRECT ANSWER-
Speculative
When the ___ is less than the yield to maturity, the bond sells at a/the ___ the par
value. - CORRECT ANSWER-1. Coupon rate
2. discount to
Zero-Coupon Bonds are - CORRECT ANSWER-priced at a deep discount
Stocks are different from bonds because - CORRECT ANSWER-stocks, unlike bonds,
represent residual ownership
Bonds are different from stocks because ________ - CORRECT ANSWER-bonds
promise fixed payments for the length of their maturity
BRAINSCAPE1
FI 302 Exam 2- Whaley Exam with
complete solutions latest version
A bond is a ___ instrument by which a borrower of funds agrees to pay back the funds
with specific dates in the future. - CORRECT ANSWER-Long-term debt
The appropriate rate to use to discount the cash flows of a bond in order to determine
the current price is the ____. - CORRECT ANSWER-Yield to maturity
Trials Inc. has issued 30-year $1000 face value, 10% annual coupon bonds, with a yield
to maturity of 9.0%. The annual interest payment for the bond is ____. - CORRECT
ANSWER-$100
The ____ is the regular interest payment of the bond. - CORRECT ANSWER-Coupon
The ___ is the expiration date of the bond. - CORRECT ANSWER-Maturity date
The _____ is the interest rate printed on the bond. - CORRECT ANSWER-Coupon rate
"Junk" bonds are a street name for ____ grade bonds. - CORRECT ANSWER-
Speculative
When the ___ is less than the yield to maturity, the bond sells at a/the ___ the par
value. - CORRECT ANSWER-1. Coupon rate
2. discount to
Zero-Coupon Bonds are - CORRECT ANSWER-priced at a deep discount
Stocks are different from bonds because - CORRECT ANSWER-stocks, unlike bonds,
represent residual ownership
Bonds are different from stocks because ________ - CORRECT ANSWER-bonds
promise fixed payments for the length of their maturity
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