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FINA 3315 EXAM 2 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
Which of the following strategies appeal to investors who place
primary emphasis on the storage of value aspects of an
investment?
I.buy and hold
II.short−term trading
III. quality long−term growth
IV. consistent dividend record - correct answer-I, III and IV only
Bonds with one of the top four ratings (Aaa through Baa, or
AAA through BBB) are designated as - correct answer-
investment grade bonds
Treasury STRIPS are securities created by stripping the
coupon and principal payments made by an ordinary bond and
selling them as individual securities. A U.S. Treasury note with
exactly four years to maturity most likely can be broken
into as many as: - correct answer-9 Treasury STRIPS
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Debt securities issued by the Federal Home Loan Bank, the
Student Loan Marketing Association and the Government
National Mortgage Association are known as - correct answer-
agency bonds
Market segmentation theory explains the typical upward sloping
shape of yield curves as a function of - correct answer-normally
greater demand for short term notes than for long- term bonds
Because common shareholders are entitled to the profits that
remain after all of a corporation's other obligations have
been met, common shareholders are known as - correct
answer-residual owners
An efficient market reflects - correct answer-all information
including predictions about future information.
Which one of the following statements about common stock
returns is true? - correct answer-over the last 5 decades, stock
market returns have averaged between 10% and 12%.
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Which of the following statements are correct in respect to
high−yield bonds?
I. They are junk bonds with highly unpredictable rates of return.
II.The issuing corporation usually has an excessive amount of
debt.
III. They possess a high level of default and market risk.
IV. They are often subordinated debentures. - correct answer-I,
II, III, and IV
Companies with strong earnings but limited growth
opportunities - correct answer-generally pay high dividends
A stock will be an attractive investment if the required rate of
return exceeds the expected rate of return. - correct answer-
false
In an efficient market, prices appear to move randomly because
- correct answer-only new information affects stock prices
FINA 3315 EXAM 2 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
Which of the following strategies appeal to investors who place
primary emphasis on the storage of value aspects of an
investment?
I.buy and hold
II.short−term trading
III. quality long−term growth
IV. consistent dividend record - correct answer-I, III and IV only
Bonds with one of the top four ratings (Aaa through Baa, or
AAA through BBB) are designated as - correct answer-
investment grade bonds
Treasury STRIPS are securities created by stripping the
coupon and principal payments made by an ordinary bond and
selling them as individual securities. A U.S. Treasury note with
exactly four years to maturity most likely can be broken
into as many as: - correct answer-9 Treasury STRIPS
, Page | 2
Debt securities issued by the Federal Home Loan Bank, the
Student Loan Marketing Association and the Government
National Mortgage Association are known as - correct answer-
agency bonds
Market segmentation theory explains the typical upward sloping
shape of yield curves as a function of - correct answer-normally
greater demand for short term notes than for long- term bonds
Because common shareholders are entitled to the profits that
remain after all of a corporation's other obligations have
been met, common shareholders are known as - correct
answer-residual owners
An efficient market reflects - correct answer-all information
including predictions about future information.
Which one of the following statements about common stock
returns is true? - correct answer-over the last 5 decades, stock
market returns have averaged between 10% and 12%.
, Page | 3
Which of the following statements are correct in respect to
high−yield bonds?
I. They are junk bonds with highly unpredictable rates of return.
II.The issuing corporation usually has an excessive amount of
debt.
III. They possess a high level of default and market risk.
IV. They are often subordinated debentures. - correct answer-I,
II, III, and IV
Companies with strong earnings but limited growth
opportunities - correct answer-generally pay high dividends
A stock will be an attractive investment if the required rate of
return exceeds the expected rate of return. - correct answer-
false
In an efficient market, prices appear to move randomly because
- correct answer-only new information affects stock prices
