Highest to lowest returns and risk

Assignment Help Corporate Finance

Reference no: EM1316389

Multiple Choice questions on Yield.

1. Which of the following statements is NOT CORRECT?

a. If a bond is selling at its par value, its current yield equals its yield to maturity.

b. If a bond is selling at a discount to par, its current yield will be less than its yield to maturity.

c. All else equal, bonds with longer maturities have more interest rate (price) risk than do bonds with shorter maturities.

d. All else equal, bonds with larger coupons have greater interest rate (price) risk than do bonds with smaller coupons.

e. If a bond is selling at a premium, its current yield will be greater than its yield to maturity.

2. Over the past 75 years, we have observed that investments with the highest average Annual returns also tend to have the highest standard deviations of their annual returns. This observation supports the notion that there is a positive correlation between risk and return. Which of the following lists correctly ranks investments from highest to lowest returns and risk (thus, the highest risk security should be shown first, the lowest risk securities shown last)?

a. small-company stocks, large-company stocks, long-term corporate bonds, long-term government bonds, U.S. Treasury bills

b. small-company stocks, long-term corporate bonds, large-company stocks, long-term government bonds, U.S. Treasury bills

c. large-company stocks, small-company stocks, long-term corporate bonds, U.S. Treasury bills, long-term government bonds

d. U.S. Treasury bills, long-term government bonds, long-term corporate

Reference no: EM1316389

Questions Cloud

Significance was significant change in cholesterol level : Utilizing the 5% level of significance was there a significant change in cholesterol level. Elucidate your answer to someone who has never ever taken a course in statistics.

Test of inference directionality of test : For each of the following two scenarios/descriptions (pp.2), please select two responses, one to indicate the most appropriate test of inference

Give preparation of common size statement for financial : Give Preparation of common size statement for financial analysis and what is causing this drop in net income

Calculating the price which is charged by firm : Suppose Acme decides that instead of cutting the wholesale price of the CD players it will offer a $50 rebate to the consumer (that is, the wholesale price is $200.

Highest to lowest returns and risk : Which of the following lists correctly ranks investments from highest to lowest returns and risk (thus, the highest risk security should be shown first, the lowest risk securities shown last)?

Find the derivative using logarithmic differentiation : Find the derivative using logarithmic differentiation

Their total cholesterol levels before also after the diet : Utilizing the 5% level of significance as there was a significant change in cholesterol level. Their total cholesterol levels before also after the diet.

Negative aspects of financial statement : Analyzing the positive and negative aspects of financial statement - Negative aspects of Kevin and Stacy's current financial status.

Categorising the utility functions : Rachel utility function is given by U= I 1/2 , where I represents annual income in thousands of dollars. Assume Rachel is currently earning income of $23,000 (I =23) and can earn that income next year with certainty.

User Account

All Pages