Personal Finance Quiz
100% (15 out of 15 correct) | Responses to questions are indicated by the symbol. | |
| 1. | An SSU's A. | income and expenditures for the period are equal. | B. | income for the period exceeds expenditures. | C. | expenditures for the period exceed receipts. | D. | spending is entirely financed by credit cards |
A surplus position is when income for the period exceeds planned expenditures. (see page 7). |
| 2. | Which of the following is an example of indirect financing? A. | an SSU purchasing a financial claim from a DSU | B. | an SSU purchasing a financial claim from a dealer | C. | an SSU purchasing a financial claim from a commercial bank | D. | an SSU purchasing a financial claim from an underwriter |
Intermediaries transform direct claims sold by DSUs and make them more attractive to SSUs, helping …show more content…
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| 1. | Which of the following statements is true? A. | Bond prices and interest rates move together. | B. | Coupon rates are fixed at the time of issue. | C. | Short-term securities have large price swings relative to long-term securities. | D. | The higher the coupon, the lower the price of a bond) |
The coupon rate is close to the market rate of interest on similar bonds at the time of issuance. (see page 13) |
| 2. | What is the price of a corporate bond maturing in 5 years that has a 5% coupon (annual payments), a $1,000 face value, and is rated Aa) A local newspaper's financial section reports that the yields on 5 year bonds are: Aaa = 6%, Aa = 7%, and A = 8%. A. | $900 | B. | $918 | C. | $1900 | D. | $500 |
The price of the corporate bond (Pb) is: (see page 9) |
| 3. | Debbie Vivien purchases a one-year discount bond with a face value of $1,000 for $862.07. What is the yield of the bond? A. | 10% | B. | 12% | C. | 16% | D. | 18% |
The yield is 16%. (see pages
| 1. | An SSU's A. | income and expenditures for the period are equal. | B. | income for the period exceeds expenditures. | C. | expenditures for the period exceed receipts. | D. | spending is entirely financed by credit cards |
A surplus position is when income for the period exceeds planned expenditures. (see page 7). |
| 2. | Which of the following is an example of indirect financing? A. | an SSU purchasing a financial claim from a DSU | B. | an SSU purchasing a financial claim from a dealer | C. | an SSU purchasing a financial claim from a commercial bank | D. | an SSU purchasing a financial claim from an underwriter |
Intermediaries transform direct claims sold by DSUs and make them more attractive to SSUs, helping …show more content…
| |
| 1. | Which of the following statements is true? A. | Bond prices and interest rates move together. | B. | Coupon rates are fixed at the time of issue. | C. | Short-term securities have large price swings relative to long-term securities. | D. | The higher the coupon, the lower the price of a bond) |
The coupon rate is close to the market rate of interest on similar bonds at the time of issuance. (see page 13) |
| 2. | What is the price of a corporate bond maturing in 5 years that has a 5% coupon (annual payments), a $1,000 face value, and is rated Aa) A local newspaper's financial section reports that the yields on 5 year bonds are: Aaa = 6%, Aa = 7%, and A = 8%. A. | $900 | B. | $918 | C. | $1900 | D. | $500 |
The price of the corporate bond (Pb) is: (see page 9) |
| 3. | Debbie Vivien purchases a one-year discount bond with a face value of $1,000 for $862.07. What is the yield of the bond? A. | 10% | B. | 12% | C. | 16% | D. | 18% |
The yield is 16%. (see pages