Question 1

You turn to the bond market page of a newspaper and look under the column headed "Bonds" and see that it says,"Alpha 7 1/2 25" this information indicates that

Accepted Answer

A)  the coupon rate on this bond is 7.5 percent. 
B)  the year this bond matures is 2025. 
C)  the current yield on this bond is 7.5 percent. 
D)  the current yield on this bond has risen 0.25 percent since the previous trading day. 
E)  a and b 
A)  the coupon rate on this bond is 7.5 percent. 
B)  the year this bond matures is 2025. 
C)  the current yield on this bond is 7.5 percent. 
D)  the current yield on this bond has risen 0.25 percent since the previous trading day. 
E)  a and b

Question 2

-Refer to Exhibit 38-1.The yield on bond A is approximately

Accepted Answer

A)  7.5 percent. 
B)  0.06 percent. 
C)  6.0 percent. 
D)  0.075 percent. 
A)  7.5 percent. 
B)  0.06 percent. 
C)  6.0 percent. 
D)  0.075 percent.

Question 3

The typical face value of a corporate bond is $1,000.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to Exhibit 38-2.If the closing price of Prancer's stock on the previous day was $55.50,what value goes in blank (C)?

Accepted Answer

A)  +0.75 
B)  -0.50 
C)  +0.50 
D)  +0.25 
E)  There is not enough information given to answer this question. 
A)  +0.75 
B)  -0.50 
C)  +0.50 
D)  +0.25 
E)  There is not enough information given to answer this question.

Question 5

-Refer to Exhibit 38-4.If the closing price of Brown,Inc.'s stock on the previous day was $43.10,what value goes in blank (A)?

Accepted Answer

A)  -1.00 
B)  +1.00 
C)  -0.50 
D)  +0.50 
E)  There is not enough information given to answer this question. 
A)  -1.00 
B)  +1.00 
C)  -0.50 
D)  +0.50 
E)  There is not enough information given to answer this question.

Question 6

A futures contract is a contract in which the seller agrees to provide a given good to the buyer on a predetermined future date at an agreed-upon price.

Accepted Answer

A) True 
 B)False

Question 7

When a person buys a bond of the XYZ Corporation,he or she can expect to

Accepted Answer

A)  pay the corporation a certain amount of money each quarter of the year. 
B)  receive the face value of the bond each year and the face value of the bond when the bond matures. 
C)  receive the coupon rate times the face value of the bond each year and the face value of the bond when the bond matures. 
D)  receive the face value of the bond each year in perpetuity. 
A)  pay the corporation a certain amount of money each quarter of the year. 
B)  receive the face value of the bond each year and the face value of the bond when the bond matures. 
C)  receive the coupon rate times the face value of the bond each year and the face value of the bond when the bond matures. 
D)  receive the face value of the bond each year in perpetuity.

Question 8

If the stock market quote in the newspaper reads 752 in the column headed "Vol 00s",it means that 752 shares of this stock were traded on this particular day.

Accepted Answer

A) True 
 B)False

Question 9

The face value of a bond is

Accepted Answer

A)  the dollar amount that a person would receive if he or she were to sell the bond. 
B)  the dollar amount that a person would receive if he or she were to buy the bond. 
C)  the total value of payments that will be made over the course of the bond's life. 
D)  the dollar amount of the bond's final payment at maturity. 
A)  the dollar amount that a person would receive if he or she were to sell the bond. 
B)  the dollar amount that a person would receive if he or she were to buy the bond. 
C)  the total value of payments that will be made over the course of the bond's life. 
D)  the dollar amount of the bond's final payment at maturity.

Question 10

The original Dow Jones Industrial Average (DJIA)contained ____________ stocks,while the DJIA now consists of ____________ stocks.

Accepted Answer

A)  10; 500 
B)  11; 30 
C)  15; 50 
D)  20; 60 
A)  10; 500 
B)  11; 30 
C)  15; 50 
D)  20; 60

Question 11

If you are buying a bond that is newly issued by the corporation,you are buying it in the primary market.

Accepted Answer

A) True 
 B)False

Question 12

If the bid value of a Treasury bond is listed as "112:16",it means that the buyer is willing to pay $1,125 for the bond.

Accepted Answer

A) True 
 B)False

Question 13

The beginnings of the New York Stock Exchange can be traced back to a small group of men who bought and sold stock in New York in

Accepted Answer

A)  1792. 
B)  1866. 
C)  1892. 
D)  1929. 
A)  1792. 
B)  1866. 
C)  1892. 
D)  1929.

Question 14

-Refer to Exhibit 38-1.The yield on bond D is approximately

Accepted Answer

A)  11 percent. 
B)  3 percent. 
C)  6.4 percent. 
D)  0.064 percent 
A)  11 percent. 
B)  3 percent. 
C)  6.4 percent. 
D)  0.064 percent

Question 15

A stock is purchased either for the expected gain in the price of the stock,for the dividends that the stock may pay,or both.

Accepted Answer

A) True 
 B)False

Question 16

The issuer of a bond is a lender.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that the annual dividend per share of stock is $5.40 and the closing price of the stock is $72.50,the yield of the stock would be

Accepted Answer

A)  13.43% 
B)  7.45% 
C)  23.62% 
D)  8.38% 
A)  13.43% 
B)  7.45% 
C)  23.62% 
D)  8.38%

Question 18

Which of the following can issue bonds?

Accepted Answer

A)  the government 
B)  corporations 
C)  government agencies 
D)  all of the above 
A)  the government 
B)  corporations 
C)  government agencies 
D)  all of the above

Question 19

The acronym NASDAQ (one of the stock exchanges)stands for

Accepted Answer

A)  National Academy of Stock Dealers Automated Quotations 
B)  New American Securities Dealers Automated Quotations 
C)  National Association of Securities Dealers Automated Quotations 
D)  North American Stock Dealers Automated Quotations 
A)  National Academy of Stock Dealers Automated Quotations 
B)  New American Securities Dealers Automated Quotations 
C)  National Association of Securities Dealers Automated Quotations 
D)  North American Stock Dealers Automated Quotations

Question 20

A private equity firm is a group of investors that buys up the publicly traded stock of a large corporation and then takes the corporation private.

Accepted Answer

A) True 
 B)False

Exam 24: Stocks,bonds,futures,and Options

You turn to the bond market page of a newspaper and look under the column headed "Bonds" and see that it says,"Alpha 7 1/2 25" this information indicates that

-Refer to Exhibit 38-1.The yield on bond A is approximately

The typical face value of a corporate bond is $1,000.

-Refer to Exhibit 38-2.If the closing price of Prancer's stock on the previous day was $55.50,what value goes in blank (C)?

-Refer to Exhibit 38-4.If the closing price of Brown,Inc.'s stock on the previous day was $43.10,what value goes in blank (A)?

A futures contract is a contract in which the seller agrees to provide a given good to the buyer on a predetermined future date at an agreed-upon price.

When a person buys a bond of the XYZ Corporation,he or she can expect to

If the stock market quote in the newspaper reads 752 in the column headed "Vol 00s",it means that 752 shares of this stock were traded on this particular day.

The face value of a bond is

The original Dow Jones Industrial Average (DJIA)contained ____________ stocks,while the DJIA now consists of ____________ stocks.

If you are buying a bond that is newly issued by the corporation,you are buying it in the primary market.

If the bid value of a Treasury bond is listed as "112:16",it means that the buyer is willing to pay $1,125 for the bond.

The beginnings of the New York Stock Exchange can be traced back to a small group of men who bought and sold stock in New York in

-Refer to Exhibit 38-1.The yield on bond D is approximately

A stock is purchased either for the expected gain in the price of the stock,for the dividends that the stock may pay,or both.

The issuer of a bond is a lender.

Suppose that the annual dividend per share of stock is $5.40 and the closing price of the stock is $72.50,the yield of the stock would be

Which of the following can issue bonds?

The acronym NASDAQ (one of the stock exchanges)stands for

A private equity firm is a group of investors that buys up the publicly traded stock of a large corporation and then takes the corporation private.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Filters

The original Dow Jones Industrial Average (DJIA)contained stocks,while the DJIA now consists of stocks.