Bonds pays interest based on an inflation index

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Reference no: EM131525072

1. Which of the following factors will lead to an increase in interest rates?

a Recession

b Trade surplus

c Contraction

d Deflation

e Federal deficit

2. The book value of 4 million shares of Zircon Global Ltd. is $34 million. What is the book value per share of Zircon Global Ltd?

a $8.50 per share

b $0.60 per share

c $136.00 per share

d $4.00 per share

e $30.00 per share

3. The percentage rate of return that investors earn on a bond consists of a(n):

a interest yield plus the maturity value of the bond.

b market interest rate plus the coupon interest rate.

c interest yield plus a capital gains yield.

4. Having the manager's compensation tied to the company's performance increases the agency problem that corporations face.

a true

b false

5. The present value of an investment increases as the opportunity cost rate (interest rate) increases.

a false

b true

6. Which of the following is the yield of a bond that offers a risk-free rate of 4% and a risk premium of 2%?

a 2%

b 8%

c 6%

d 12%

7. Which of the following bonds pays interest based on an inflation index?

a Income bonds

b Purchasing power bonds

c Treasury bills Floating-rate bonds

d Zero coupon bonds

Reference no: EM131525072

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