Reference no: EM131328096
a. Typically, liquidity risk is a. low in both the municipal market and the corporate market. b. high in the agency market and low in the municipal market. c. low in the Treasury market and high in the corporate market. d. high in the Treasury market and low in the corporate market.
b. Which of the following factors are included in the rating analysis of a corporate bond? :I. The issue's indenture provisions :II. The liquidity position of the issuing company :III. The issuing company's relative debt burden :IV. The stability of the company's earnings. a. II, III and IV only b. I, II and III only c. I, II, III and IV d. I and II only
c. Floating rate preferred stock pays a dividend that a. changes within a preset range in response to the consumer price level. b. increases annually with the rate of inflation. c. varies within a preset range in response to changes in Treasury yields. d. varies from year to year as determined by the Board of Directors of the firm.
d. Pass-through securities backed by pools of auto loans, credit card bills, and computer leases are known as a. asset-backed securities (ABSs). b. REIMCs. c. Fannie Mae securities. d. PIK bonds.
e. Which of the following are characteristics of Treasury inflation-protection securities? :I. The par value changes at a rate equal to the rate of inflation. :II. The coupon rate changes at a rate equal to the rate of inflation. :III. Taxes are imposed on the inflation adjustment only at bond maturity. :IV. TIPS help protect investors from capital losses. a. I, II and IV only b. II and III only c. I, III and IV only d. I and IV only.
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Considering changing its credit policy
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What annual interest rate will the bond? earn
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Liquidity risk-rating analysis of a corporate bond
: Which of the following factors are included in the rating analysis of a corporate bond? Floating rate preferred stock pays a dividend that. Pass-through securities backed by pools of auto loans, credit card bills, and computer leases are known as. li..
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If the yield curve begins to rise sharply
: If the yield curve begins to rise sharply, it is usually an indication that stocks are offering high returns. inflation is starting to increase, or is expected to do so in the near future. tangible investments are yielding less than intangible invest..
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: Otto Electronics issues a $834,700, 14%, 10-year mortgage note on December 31, 2013. The proceeds from the note are to be used in financing a new research laboratory. Prepare the entries for (1) the loan and (2) the first two installment payments.
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The yield on preferred stock normally is higher
: The yield on preferred stock normally is higher when a. a stock is freely callable versus being noncallable. b. dividend rates are low. c. the quality is higher versus a lower quality preferred. d. market interest rates are lower versus when they are..
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