Question 1

The distribution of a firm's capital between debt and equity is its

Accepted Answer

A)  current ratio. 
B)  liability structure. 
C)  acid ratio. 
D)  capital structure. 
A)  current ratio. 
B)  liability structure. 
C)  acid ratio. 
D)  capital structure.

Question 2

The bond contract that states the lender's rights and privileges and the borrower's obligations is called the

Accepted Answer

A)  bond syndicate. 
B)  restrictive covenant. 
C)  bond covenant. 
D)  bond indenture. 
A)  bond syndicate. 
B)  restrictive covenant. 
C)  bond covenant. 
D)  bond indenture.

Question 3

The Commodity Futures Modernization Act (2000)removed derivative securities,such as credit default swaps,from regulatory oversight.

Accepted Answer

A) True 
 B)False

Question 4

The current yield on a $6,000,10 percent coupon bond selling for $5,000 is

Accepted Answer

A)  5%. 
B)  10%. 
C)  12%. 
D)  15%. 
A)  5%. 
B)  10%. 
C)  12%. 
D)  15%.

Question 5

A requirement in the bond indenture that the firm pay off a portion of the bond issue each year is called

Accepted Answer

A)  a sinking fund. 
B)  a call provision. 
C)  a restrictive covenant. 
D)  a shelf registration. 
A)  a sinking fund. 
B)  a call provision. 
C)  a restrictive covenant. 
D)  a shelf registration.

Question 6

Capital market trading occurs in

Accepted Answer

A)  the primary market. 
B)  the secondary market. 
C)  both A and B of the above. 
D)  none of the above. 
A)  the primary market. 
B)  the secondary market. 
C)  both A and B of the above. 
D)  none of the above.

Question 7

The first step in finding the value of a bond is to

Accepted Answer

A)  discount back the cash flows using an interest rate that represents the yield available on other bonds of like risk and maturity. 
B)  identify the cash flows the holder of the bond will receive. 
C)  contact the holder of the bond. 
D)  none of the above. 
A)  discount back the cash flows using an interest rate that represents the yield available on other bonds of like risk and maturity. 
B)  identify the cash flows the holder of the bond will receive. 
C)  contact the holder of the bond. 
D)  none of the above.

Question 8

A change in the current yield ________ signals a change in the same direction of the yield to maturity.

Accepted Answer

A)  never 
B)  rarely 
C)  always 
D)  often 
A)  never 
B)  rarely 
C)  always 
D)  often

Question 9

The nearer a bond's price is to its par value and the longer the maturity of the bond,the more closely the ________ approximates the ________.

Accepted Answer

A)  current yield; yield to maturity 
B)  current yield; coupon rate 
C)  yield to maturity; current yield 
D)  yield to maturity; coupon rate 
A)  current yield; yield to maturity 
B)  current yield; coupon rate 
C)  yield to maturity; current yield 
D)  yield to maturity; coupon rate

Question 10

The largest purchasers of capital market securities are

Accepted Answer

A)  households. 
B)  corporations. 
C)  governments. 
D)  central banks. 
A)  households. 
B)  corporations. 
C)  governments. 
D)  central banks.

The distribution of a firm's capital between debt and equity is its

The bond contract that states the lender's rights and privileges and the borrower's obligations is called the

The Commodity Futures Modernization Act (2000)removed derivative securities,such as credit default swaps,from regulatory oversight.

The current yield on a $6,000,10 percent coupon bond selling for $5,000 is

A requirement in the bond indenture that the firm pay off a portion of the bond issue each year is called

Capital market trading occurs in

The first step in finding the value of a bond is to

A change in the current yield ________ signals a change in the same direction of the yield to maturity.

The nearer a bond's price is to its par value and the longer the maturity of the bond,the more closely the approximates the .

The largest purchasers of capital market securities are

Why Study Financial Markets and Institutions?

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation?

Why Do Interest Rates Change?

How Do Risk and Term Structure Affect Interest Rates?

Are Financial Markets Efficient?

Why Do Financial Institutions Exist?

Why Do Financial Crises Occur and

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

Banking Industry: Structure and Competition

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging with Financial Derivatives

Financial Crises In Emerging Market Economies

Savings Associations and Credit Unions

Finance Companies

Filters

Exam 12: The Bond Market

The distribution of a firm's capital between debt and equity is its

The bond contract that states the lender's rights and privileges and the borrower's obligations is called the

The Commodity Futures Modernization Act (2000)removed derivative securities,such as credit default swaps,from regulatory oversight.

The current yield on a $6,000,10 percent coupon bond selling for $5,000 is

A requirement in the bond indenture that the firm pay off a portion of the bond issue each year is called

Capital market trading occurs in

The first step in finding the value of a bond is to

A change in the current yield ________ signals a change in the same direction of the yield to maturity.

The nearer a bond's price is to its par value and the longer the maturity of the bond,the more closely the ________ approximates the ________.

The largest purchasers of capital market securities are

Why Study Financial Markets and Institutions?

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation?

Why Do Interest Rates Change?

How Do Risk and Term Structure Affect Interest Rates?

Are Financial Markets Efficient?

Why Do Financial Institutions Exist?

Why Do Financial Crises Occur and

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

Banking Industry: Structure and Competition

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging with Financial Derivatives

Financial Crises In Emerging Market Economies

Savings Associations and Credit Unions

Finance Companies

Filters

The nearer a bond's price is to its par value and the longer the maturity of the bond,the more closely the approximates the .