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Finance Final
Practice exam
| Question | Answer |
|---|---|
| Which one of the following terms refers to a bond's rate of return that is required by the marketplace? | Yield to maturity |
| What happens to a bond’s yield to maturity (YTM) if it’s bond rating falls? | Yield to maturity will rise |
| What is the market called that allows shareholders to resell their shares to other investors? | secondary |
| Preferred stock generally have... | generally have fixed dividends receives preference in bankruptcy over common stock |
| The net present value... | decreases as the RROR increases |
| Which one of the following defines the internal rate of return for a project | discount rate that results in zero net present value for the project |
| Which one of the following statements is correct? | the payback period ignores the TVM |
| An efficient capital market is best defined as a market in which security prices reflect which one of the following? | available information |
| One year ago, you purchased 100 shares of a stock. This morning you sold those shares and realized a total return of 8.2 percent. Given this information, you know for sure | sum of the dividend yield and the capital gains yield is 8.2% |
| Over the period of 1926-2011, which one of the following investment classes had the highest volatility of returns? | small-company stock |