公司理财(英文版)题库5

CHAPTER 5

Interest Rate and Bond Valuation Multiple Choice Questions

I. DEFINITIONS

COUPON

a 1. The stated interest payment, in dollars, made on a bond each period is called the bond’s:

a. coupon.

b. face value.

c. maturity.

d. yield to maturity.

e. coupon rate.

Difficulty level: Easy

FACE VALUE

b 2. The principal amount of a bond that is repaid at the end of the loan term is called the bond’s:

a. coupon.

b. face value.

c. maturity.

d. yield to maturity.

e. coupon rate.

Difficulty level: Easy

MATURITY

c 3. The specifie

d dat

e on which the principal amount o

f a bond is repaid is called the bond’s:

a. coupon.

b. face value.

c. maturity.

d. yield to maturity.

e. coupon rate.

Difficulty level: Easy

YIELD TO MATURITY

d 4. Th

e rate o

f return required by investors in the market for ownin

g a bond is called the:

a. coupon.

b. face value.

c. maturity.

d. yield to maturity.

e. coupon rate.

Difficulty level: Easy

COUPON RATE

e 5. The annual coupon o

f a bond divided by its face value is called the bond’s:

a. coupon.

b. face value.

d. yield to maturity.

e. coupon rate.

Difficulty level: Easy

PAR BONDS

a 6. A bond with a face value of $1,000 that sells for $1,000 in the market is called a _____ bond.

a. par value

b. discount

c. premium

d. zero coupon

e. floating rate

Difficulty level: Easy

DISCOUNT BONDS

b 7. A bond with a face value of $1,000 that sells for less than $1,000 in the market is called a

_____ bond.

a. par

b. discount

c. premium

d. zero coupon

e. floating rate

Difficulty level: Easy

PREMIUM BONDS

c 8. A bon

d with a fac

e value o

f $1,000 that sells for more than $1,000 in the market is called a

_____ bond.

a. par

b. discount

c. premium

d. zero coupon

e. floating rate

Difficulty level: Easy

UNFUNDED DEBT

d 9. Th

e unfunded debt o

f a firm is generally understood to mean the firm’s:

a. preferred stock.

b. debts that mature in more than one year.

c. debentures.

d. debts that mature in less than one year.

e. secured debt.

Difficulty level: Easy

INDENTURE

a 10. The written, legally binding agreement between the corporate borrower and the lender detailing

the terms of a bond issue is called the:

b. covenant.

c. terms of trade.

d. form 5140.

e. call provision.

Difficulty level: Easy

REGISTERED BONDS

b 11. The form of bond issue in which the registrar of the company records ownership of each bond,

with relevant payments made directly to the owner of record, is called the _____ form.

a. new-issue

b. registered

c. bearer

d. debenture

e. collateral

Difficulty level: Medium

BEARER BONDS

c 12. The form of bon

d issu

e in which the bond is issued without record o

f the owner’s name, with

relevant payments made directly to whoever physically holds the bond, is called the _____

form.

a. new-issue

b. registered

c. bearer

d. debenture

e. collateral

Difficulty level: Easy

DEBENTURES

e 13. The unsecured debts o

f a firm with maturities greater than 10 years are most literally called:

a. unfunded liabilities.

b. sinking funds.

c. bonds.

d. notes.

e. debentures.

Difficulty level: Easy

NOTES

d 14. Th

e unsecured debts o

f a firm with maturities less than 10 years are most literally called:

a. unfunded liabilities.

b. sinking funds.

c. bonds.

d. notes.

e. debentures.

Difficulty level: Easy

SINKING FUND

a 15. An account managed by the bond trustee for early bond redemption payments is called a:

a. sinking fund.

b. collateral payment account.

c. deed in trust account.

d. call provision.

e. par value fund.

Difficulty level: Easy

CALL PROVISION

b 16. An agreement giving the bond issuer the option to repurchase the bond at a specified price prior

to maturity is the _____ provision.

a. sinking fund

b. call

c. seniority

d. collateral

e. trustee

Difficulty level: Easy

CALL PREMIUM

c 17. The amount by which the call price exceeds the bond’s par value is the:

a. coupon rate.

b. redemption value.

c. call premium.

d. original-issue discount.

e. call rate.

Difficulty level: Easy

SENIORITY

e 18. In the event o

f default, _____ debt holders must give preference to more _____ debt holders in

the priority of repayment distributions.

a. short-term; long-term

b. long-term; short-term

c. senior; junior

d. senior; subordinated

e. subordinated; senior

Difficulty level: Medium

DEFERRED CALL PROVISION

d 19. A deferred call provision refers to the:

a. open market price of a callable bond on a certain date.

b. seniority of callable bonds to noncallable bonds in the event of corporate default.

c. prohibition of a company from ever redeeming callable bonds.

d. prohibition of a company from redeeming callable bonds prior to a certain dat

e.

e. amount by which the call price for a callable bond exceeds its par value.

Difficulty level: Easy

TREASURY BONDS

a 20. The long-term bonds issued by the United States government are called _____ bonds.

a. Treasury

b. municipal

c. floating-rate

d. junk

e. zero coupon

Difficulty level: Easy

MUNICIPAL BONDS

b 21. The long-term bonds issued by state and local governments in the United States are called

_____ bonds.

a. Treasury

b. municipal

c. floating-rate

d. junk

e. zero coupon

Difficulty level: Easy

ZERO COUPON BONDS

e 22. A bond that makes no coupon payments and is initially priced at a deep discount is called a

_____ bond.

a. Treasury

b. municipal

c. floating-rate

d. junk

e. zero coupon

Difficulty level: Easy

FLOATING-RATE BONDS

c 23. A bon

d that pays a variabl

e amount o

f coupon interest over time is called a _____ bond.

a. Treasury

b. municipal

c. floating-rate

d. junk

e. zero coupon

Difficulty level: Easy

PROTECTIVE COVENANT

e 24. Parts o

f the indenture limitin

g certain actions that might be taken during the term of the loan to

protect the interests of the lender are called:

a. trustee relationships.

b. sinking funds provisions.

c. bond ratings.

d. deferred call provisions.

e. protective covenants.

Difficulty level: Easy

CONVERTIBLE BONDS

d 25. A bond which, at th

e election o

f the holder, can be swapped for a fixed number of shares of

common stock at any time prior to the bond’s maturity is called a _____ bond.

a. zero coupon

b. callable

c. putable

d. convertible

e. warrant

Difficulty level: Medium

PRICE TRANSPARENCY

a 26. A financial market is _____ if it is possible to easily observe its prices and trading volume.

a. transparent

b. open

c. ordered

d. in equilibrium

e. chaotic

Difficulty level: Medium

CURRENT YIELD

b 27. The annual coupon payment of a bond divided by its market price is called the:

a. coupon rate.

b. current yield.

c. yield to maturity.

d. bid-ask spread.

e. capital gains yield.

Difficulty level: Easy

TIP BONDS

b 28. A TIP bond’s interest rate is linked to:

a. income.

b. inflation.

c. liquidity.

d. maturity of the 30 year government bond.

e. corporate tax rates.

Difficulty level: Medium

PUT BOND

a 29. A bond that allows the holder to force the issuer to buy back bonds at a stated rate is called a:

a. put bond.

b. call bond.

c. guaranteed bon

d.

d. TIP bond.

e. none of the above.

Difficulty level: Medium

NOMINAL RATES

e 30. Interest rates or rates o

f return on investments that have not been adjusted for the effects of

inflation are called _____ rates.

a. coupon

b. stripped

c. effective

d. real

e. nominal

Difficulty level: Medium

REAL RATES

a 31. Interest rates or rates of return on investments that have been adjusted for the effects of

inflation are called _____ rates.

a. real

b. nominal

c. effective

d. stripped

e. coupon

Difficulty level: Medium

FISHER EFFECT

b 32. The relationship between nominal rates, real rates, and inflation is known as the:

a. Miller and Modigliani theorem.

b. Fisher effect.

c. Gordon growth model.

d. term structure of interest rates.

e. interest rate risk premium.

Difficulty level: Medium

TERM STRUCTURE OF INTEREST RATES

c 33. The relationship between nominal interest rates on default-free, pure discount securities an

d the

time to maturity is called the:

a. liquidity effect.

b. Fisher effect.

c. term structure of interest rates.

d. inflation premium.

e. interest rate risk premium.

Difficulty level: Medium

INFLATION PREMIUM

d 34. Th

e _____ premium is that portion o

f a nominal interest rate or bond yield that represents

compensation for expected future overall price appreciation.

a. default risk

b. taxability

c. liquidity

d. inflation

e. interest rate risk

Difficulty level: Easy

DEFAULT RISK PREMIUM

a 35. The _____ premium is that portion of a nominal interest rate or bond yield that represents

compensation for the possibility of nonpayment by the bond issuer.

a. default risk

b. taxability

c. liquidity

d. inflation

e. interest rate risk

Difficulty level: Easy

II. CONCEPTS

BOND FEATURES

d 36. A bond with a 7 % coupon that pays interest semi-annually and is priced at par will hav

e a

market price of _____ and interest payments in the amount of _____ each.

a. $1,007; $70

b. $1,070; $35

c. $1,070; $70

d. $1,000; $35

e. $1,000; $70

Difficulty level: Medium

BOND PRICES AND YIELDS

e 37. All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate.

a. a premium; higher than

b. a premium; equal to

c. at par; higher than

d. at par; less than

e. a discount; higher than

Difficulty level: Medium

BOND PRICES AND YIELDS

d 38. All els

e constant, a coupon bond that is selling at a premium, must have:

a. a coupon rate that is equal to the yield to maturity.

b. a market price that is less than par value.

c. semi-annual interest payments.

d. a yield to maturity that is less than the coupon rat

e.

e. a coupon rate that is less than the yield to maturity.

Difficulty level: Easy

BOND PRICES

c 39. The market price of a bon

d is equal to th

e present value o

f the:

a. face value minus the present value of the annuity payments.

b. annuity payments plus the future value of the face amount.

c. face value plus the present value of the annuity payments.

d. face value plus the future value of the annuity payments.

e. annuity payments minus the face value of the bond.

Difficulty level: Easy

BOND PRICES

a 40. As the yield to maturity increases, the:

a. amount the investor is willing to pay to buy a bond decreases.

b. longer the time to maturity.

c. lower the coupon rate desired by that investor.

d. higher the price the investor offers to buy a bond.

e. lower the rate of return desired by the investor.

Difficulty level: Easy

SEMIANNNUAL BONDS

e 41. American Fortunes is preparing a bond offering with an 8 % coupon rate. The

bonds will be repaid in 10 years. The company plans to issue the bonds at par value and pay

interest semiannually. Given this, which of the following statements are correct?

I. The initial selling price of each bond will be $1,000.

II. A fter the bonds have been outstanding for 1 year, you should use 9 as the number of compounding periods when calculating the market value of the bond.

III. Each interest payment per bond will be $40.

IV. The yield to maturity when the bonds are first issued is 8 %.

a. I and II only

b. II and III only

c. II, III, and IV only

d. I, II, and III only

e. I, III, and IV only

Difficulty level: Medium

SEMIANNUAL BONDS AND EFFECTIVE ANNUAL RATE

d 42. Th

e newly issued bonds o

f the Wynslow Corp. offer a 6 % coupon with semiannual interest

payments. The bonds are currently priced at par value. The effective annual rate provided by these bonds must be:

a. equal to 3 %.

b. greater than 3 % but less than 4 %.

c. equal to 6 %.

d. greater than 6 % but less than 7 %.

e. equal to 12 %.

Difficulty level: Medium

INTEREST RATE RISK

d 43. Which on

e o

f the followin

g statements is correct concerning interest rate risk as it relates to

bonds, all else equal?

a. The shorter the time to maturity, the greater the interest rate risk.

b. The higher the coupon rate, the greater the interest rate risk.

c. For a bond selling at par value, there is no interest rate risk.

d. The greater the number of semiannual interest payments, the greater the interest rate risk.

e. The lower the amount of each interest payment, the lower the interest rate risk.

Difficulty level: Medium

INTEREST RATE RISK

e 44. Which one o

f the followin

g bonds has the greatest interest rate risk?

a. 5-year; 9 % coupon

b. 5-year; 7 % coupon

c. 7-year; 7 % coupon

d. 9-year; 9 % coupon

e. 9-year; 7 % coupon

Difficulty level: Medium

INTEREST RATE RISK

b 45. Interest rate risk _____ as the time to maturity increases.

a. increases at an increasing rate

b. increases at a decreasing rate

c. increases at a constant rate

d. decreases at an increasing rate

e. decreases at a decreasing rate

Difficulty level: Medium

INTEREST RATE RISK

c 46. You own a bon

d that has a 7 % coupon and matures in 12 years. You purchased

this bond at par value when it was originally issued. If the current market rate for this

type and quality of bond is 7.5 %, then you would expect:

a. the bond issuer to increase the amount of each interest payment on these bonds.

b. the yield to maturity to remain constant due to the fixed coupon rate.

c. to realize a capital loss if you sold the bond at the market price today.

d. today’s market price to exceed the face value of the bond.

e. the current yield today to be less than 7 %.

Difficulty level: Medium

INTEREST RATE RISK

b 47. A brand with semi-annual interest payments, all else equal, would be priced _________ than

one with annual interest payments.

a. higher

b. lower

c. the same

d. it is impossible to tell

e. either higher or the same

Difficulty level: Medium

公司理财(英文版)题库2说课讲解

公司理财(英文版)题 库2

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公司理财(英文版)题库2

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完整word版公司理财英文版题库8

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公司理财(英文版)题库15

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Chapter 02 Financial Statements and Cash Flow Answer Key Multiple Choice Questions 1.The financial statement showing a firm's accounting value on a particular date is the: A.income statement. B.balance sheet. C.statement of cash flows. D.tax reconciliation statement. E.shareholders' equity sheet. Difficulty level: Easy Topic: BALANCE SHEET Type: DEFINITIONS 2.A current asset is: A.an item currently owned by the firm. B.an item that the firm expects to own within the next year. C.an item currently owned by the firm that will convert to cash within the next 12 months. D.the amount of cash on hand the firm currently shows on its balance sheet. E.the market value of all items currently owned by the firm. Difficulty level: Easy Topic: CURRENT ASSETS Type: DEFINITIONS

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v .. . .. CHAPTER 2 Financial Statements & Cash Flow Multiple Choice Questions: I. DEFINITIONS BALANCE SHEET b 1. The financial statement showing a firm’s accounting value on a particular date is the: a. income statement. b. balance sheet. c. statement of cash flows. d. tax reconciliation statement. e. shareholders’ equity sheet. Difficulty level: Easy CURRENT ASSETS c 2. A current asset is: a. an item currently owned by the firm. b. an item that the firm expects to own within the next year. c. an item currently owned by the firm that will convert to cash within the next 12 months. d. the amount of cash on hand the firm currently shows on its balance sheet. e. the market value of all items currently owned by the firm. Difficulty level: Easy LONG-TERM DEBT b 3. The long-term debts of a firm are liabilities: a. that come due within the next 12 months. b. that do not come due for at least 12 months. c. owed to the firm’s suppliers. d. owed to the firm’s shareholders. e. the firm expects to incur within the next 12 months. Difficulty level: Easy NET WORKING CAPITAL e 4. Net working capital is defined as: a. total liabilities minus shareholders’ equity. b. current liabilities minus shareholders’ equity.

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3. The process of planning and managing a firm's long-term investments is called: A. working capital management. B. financial depreciation. C. agency cost analysis. D. capital budgeting. E. capital structure. Difficulty level: Easy Topic: CAPITAL BUDGETING Type: DEFINITIONS 4. The mixture of debt and equity used by a firm to finance its operations is called: A. working capital management. B. financial depreciation. C. cost analysis. D. capital budgeting. E. capital structure. 5. The management of a firm's short-term assets and liabilities is called: A. working capital management. B. debt management. C. equity management. D. capital budgeting. E. capital structure.