1. A bond with a rating of B+ would be considered _____________________.

2. What is the value of a bond with semiannual coupon payments, a 12% coupon, five year maturity, in a market where interest rates are 7%. Round your answer to two decimal points. Do no include a negative sign

3. What is the value of bond with annual coupon payments, a 6% coupon, ten year maturity, and market interest rates of 3%. Round your answer to two decimal points. Do not include a negative sign.

4. What is the price of a zero (pure discount) bond with an interest rate of 6% and a maturity of six years. Round your answer to two decimal points and do not include a negative sign. Hint: make the payment 0.

5. Which of the following are not a characteristic of preferred stock.

A. no maturity,

B. dividend depending upon profits

C. fixed dividends,

D Perpetuity

6. A company has earnings per share of $1.22. Its average sector PE ratio is 12.3. What may be a fair price to pay for the stock. Round your number to two decimal points. Hint: Just rearrange the PE formula.

7. When you purchase a home, you may compare its value on a price per square foot basis. A similar comparison for stocks may be price per.

A. assets per share,

B. fixed assets per share,

C. none of the above

D. earnings per share

8. A bond's credit risk premium, to a large degree, is determined by _______________________________ .

A. credit rating agencies,

B. Big Foot,

C. investment banks

D. the Federal Reser

9. The maturity risk premium of a bond can be seen visually in a ___________________ .

A. Premium map

B. mirror

C. yield curve

D. maturity scenario chart

10. Market rates on government bonds do not currently account for _____________________ .

A. Inflation

B. credit risk

C. Christmas

D. maturity

11. A CRP may measure the added return required in another _________________________

A. jurisdiction

B. country

C. state

D. planet

12. Rates, forever and ever, worlds without end, are quoted ____________________________ .

A. monthly

B. daily

C. regularly

D. annually

13. Yields on government bonds are known as the

A. te of no return

B. sovereign risk rate

C. risk free rate

D. government risk rate

14.