When repaying an amortized loan, the interest payments… Show more Question 40 2 points 2 points 2 points 2 points 2 points Save When repaying an amortized loan, the interest payments increase over time due to the compounding process. When repaying an amortized loan, the interest payments increase over time due to the compounding process. True False True False Question 41 2 points 2 points 2 points 2 points 2 points Save Which of the following is the slope of the security market line? Which of the following is the slope of the security market line? security market line one it varies depending on risk beta security market line one it varies depending on risk beta Question 42 2 points 2 points 2 points 2 points 2 points Save A bond is a long-term promissory note issued by the firm. A bond is a long-term promissory note issued by the firm. True False True False Question 43 2 points 2 points 2 points 2 points 2 points Save OatEaters Corporation bonds are currently priced at $953.77. They have a par value of $1,000 and 6 years to maturity. They pay an annual coupon rate of 7%. What is the yield to maturity on this bond? OatEaters Corporation bonds are currently priced at $953.77. They have a par value of $1,000 and 6 years to maturity. They pay an annual coupon rate of 7%. What is the yield to maturity on this bond? 4% 6 1/2% 19% 8% 4% 6 1/2% 19% 8% Question 44 2 points 2 points 2 points 2 points 2 points Save Total risk equals systematic risk plus unsystematic risk. Total risk equals systematic risk plus unsystematic risk. True False True False Question 45 2 points 2 points 2 points 2 points 2 points Save All of the following affect the value of a bond except: All of the following affect the value of a bond except: investors’ required rate of return the recorded value of the firm’s assets the coupon rate of interest the maturity date of the bond investors’ required rate of return the recorded value of the firm’s assets the coupon rate of interest the maturity date of the bond Question 46 2 points 2 points 2 points 2 points 2 points Save A bond maturing in 10 years pays $50 semi-annually and $1,000 upon maturity. Assuming 10% per year compounded semi-annually is the appropriate market discount rate, what is the present value of the bond (round to nearest $10)? A bond maturing in 10 years pays $50 semi-annually and $1,000 upon maturity. Assuming 10% per year compounded semi-annually is the appropriate market discount rate, what is the present value of the bond (round to nearest $10)? $1,010 $925 $880 $1,000 $1,010 $925 $880 $1,000 Question 47 2 points 2 points 2 points 2 points 2 points Save Which of the following should investors consider when determining their required rate of return? Which of the following should investors consider when determining their required rate of return? The risk of the investment. Their opportunity cost of funds. The risk-free rate of return. All of the above. The risk of the investment. Their opportunity cost of funds. The risk-free rate of return. All of the above. Question 48 2 points 2 points 2 points 2 points 2 points Save The expected rate of return on a share of common stock whose dividends are growing at a constant rate (g) is which of the following, where D1 is the next dividend and Vc is the current value of the stock? The expected rate of return on a share of common stock whose dividends are growing at a constant rate (g) is which of the following, where D1 is the next dividend and Vc is the current value of the stock? (D1 + g)/Vc D1/Vc D1/g none of the above (D1 + g)/Vc D1/Vc D1/g none of the above Question 49 2 points 2 points 2 points 2 points 2 points Save What is the name given to the equation that financial managers use to measure an investor’s required rate of return? What is the name given to the equation that financial managers use to measure an investor’s required rate of return? The standard deviation. The capital asset pricing model. The coefficient of variation. The MIRR. The standard deviation. The capital asset pricing model. The coefficient of variation. The MIRR. Question 50 2 points 2 points 2 points 2 points 2 points Save The appropriate measure for risk according to the capital asset pricing model is: The appropriate measure for risk according to the capital asset pricing model is: the standard deviation of a firm’s cash flows alpha the coefficient of variation of a firm’s cash flows none of the above the standard deviation of a firm’s cash flows alpha the coefficient of variation of a firm’s cash flows none of the above • Show less