You are an investor and you want to achieve the highest… Show more Question 18 2 points 2 points 2 points 2 points 2 points Save You are an investor and you want to achieve the highest possible return on your money. Which would be best for you to do, everything else equal? You are an investor and you want to achieve the highest possible return on your money. Which would be best for you to do, everything else equal? Set aside funds on a quarterly basis to make investments. Set aside funds on a semi-annual basis to make investments. Set aside funds on a monthly basis to make investments. Set aside funds on an annual basis to make investments. Set aside funds on a quarterly basis to make investments. Set aside funds on a semi-annual basis to make investments. Set aside funds on a monthly basis to make investments. Set aside funds on an annual basis to make investments. Question 19 2 points 2 points 2 points 2 points 2 points Save Unique security risk can be eliminated from an investor’s portfolio through diversification. Unique security risk can be eliminated from an investor’s portfolio through diversification. True False True False Question 20 2 points 2 points 2 points 2 points 2 points Save The present value of a future sum of money increases as the number of years before the payment is received increases. The present value of a future sum of money increases as the number of years before the payment is received increases. True False True False Question 21 2 points 2 points 2 points 2 points 2 points Save A perpetuity is an investment that continues forever but pays a different dollar amount each year. A perpetuity is an investment that continues forever but pays a different dollar amount each year. True False True False Question 22 2 points 2 points 2 points 2 points 2 points Save If a corporation were to choose between issuing a debenture, a mortgage bond, or a subordinated debenture, everything else equal (such as coupon rate, maturity, etc.) which would sell for the greatest price? If a corporation were to choose between issuing a debenture, a mortgage bond, or a subordinated debenture, everything else equal (such as coupon rate, maturity, etc.) which would sell for the greatest price? The debenture. The mortgage bond. The subordinated debenture. All of the above types of bonds would sell for the same price. The debenture. The mortgage bond. The subordinated debenture. All of the above types of bonds would sell for the same price. Question 23 2 points 2 points 2 points 2 points 2 points Save The sum of the present values of an investment’s expected future cash flows is known as the investment’s intrinsic value. The sum of the present values of an investment’s expected future cash flows is known as the investment’s intrinsic value. True False True False Question 24 2 points 2 points 2 points 2 points 2 points Save What is the yield to maturity of a 16-year bond that pays a coupon rate of 8% per year, has a $1,000 par value, and is currently priced at $916? Round your answer to the nearest whole percent and assume semi-annual coupon payments. What is the yield to maturity of a 16-year bond that pays a coupon rate of 8% per year, has a $1,000 par value, and is currently priced at $916? Round your answer to the nearest whole percent and assume semi-annual coupon payments. 18% 11% 9% 7.5% 18% 11% 9% 7.5% Question 25 2 points 2 points 2 points 2 points 2 points Save In general, the required rate of return is a function of (1) the time value of money, (2) the risk of an asset, and (3) the investor’s attitude toward risk. In general, the required rate of return is a function of (1) the time value of money, (2) the risk of an asset, and (3) the investor’s attitude toward risk. True False True False Question 26 2 points 2 points 2 points 2 points 2 points Save Assume that you have $165,000 invested in a stock whose beta is 1.25, $85,000 invested in a stock whose beta is 2.35, and $235,000 invested in a stock whose beta is 1.11. What is the beta of your portfolio? Assume that you have $165,000 invested in a stock whose beta is 1.25, $85,000 invested in a stock whose beta is 2.35, and $235,000 invested in a stock whose beta is 1.11. What is the beta of your portfolio? 1.37 2.01 1.85 1.57 1.37 2.01 1.85 1.57 Question 27 2 points 2 points 2 points 2 points 2 points Save Most preferred stocks have a feature that requires all past unpaid preferred dividend payments be paid before any common stock dividends can be paid. What is the name of this feature? Most preferred stocks have a feature that requires all past unpaid preferred dividend payments be paid before any common stock dividends can be paid. What is the name of this feature? Participating Cumulative Provisional Convertible Participating Cumulative Provisional Convertible Question 28 2 points 2 points 2 points 2 points 2 points Save The Elvisalive Corporation, makers of Elvis memorabilia, has a beta of 2.75. The return on the market portfolio is 14% and the risk free rate is 4%. According to CAPM, what is the required rate of return on Elvisalive stock? The Elvisalive Corporation, makers of Elvis memorabilia, has a beta of 2.75. The return on the market portfolio is 14% and the risk free rate is 4%. According to CAPM, what is the required rate of return on Elvisalive stock? 27.5% 31.5% 11% 10% 27.5% 31.5% 11% 10% • Show less