A sinking fund call, A debt is said to be selling at par,

A sinking fund call

Assignment Help Financial Management

Reference no: EM131994066

1. If the expectations theory of the term structure of interest rates is correct, and if the other term structure theories are invalid, and we observe a downward sloping yield curve, which of the following is a true statement??

a. ?Investors expect interest rates to increase in the future.

b. ?Investors require a positive maturity risk premium.

c. ?Investors expect interest rates to decrease in the future.

d. ?Investors expect interest rates to be constant over time.

e. ?The maturity risk premium must be positive.

2. A sinking fund call:?

a. ?does not require the company to pay a call premium.

b. ?requires the company to redeem bonds at market price.

c. ?requires the company to claim back all the interest payments from the bondholders.

d. ?requires the company to pay a penalty to investors.

e. ?does not require the company to pay a small percentage of the issue every year.

3. A debt is said to be selling at par, when the _____ of the debt is equal to the _____.?

a. ?market value; face value of the debt

b. par value; discounted value of the interest payments

c. ?face value; premium payment on the exercise of a call provision

d. ?maturity value; par value of the debt

e. ?principal value; discount on the issue of a zero coupon bond

Reference no: EM131994066

Questions Cloud

Investor would be most likely to purchase zero coupon bonds : Which of the following types of investor would be most likely to purchase zero coupon bonds??

Weighted-average number of shares outstanding : Compute the weighted-average number of shares outstanding if the 48,900 shares were issued for cash.

Current financial status during financial planning process : A financial planner analyzes and evaluates a client’s current financial status during the financial planning process

Statements about relevant and irrelevant risks : Which of the following statements about relevant and irrelevant risks is true?? what is the yield to maturity on a 10-year Treasury coupon bond,

A sinking fund call : A debt is said to be selling at par, when the _____ of the debt is equal to the _____.? A sinking fund call:?

Assume that the pure expectations theory holds : Assume that the pure expectations theory holds and that the market is in equilibrium.

What is the net inflow or outflow as measured in dollar : Bronco Co. is a U.S.-based MNC that has subsidiaries in Spain and Germany. What is the net inflow or outflow as measured in U.S. dollars this year?

You have in one year from your forward contract : How many U.S. dollars will you have in one year from your forward contract?

What should the spot rate of the euro in one year : According to the IFE, what should the spot rate of the euro in one year be?

User Account

All Pages