Fin 601 Final Exam - Multiple Choice Questions & Answers

2415 words 10 pages
User
Ms Julie Ciarlante
Course
FIN-601-001 - FA 13-14
Test
FIN 601 Final Exam
Started
12/12/13 7:19 PM
Submitted
12/12/13 9:25 PM
Status
Completed
Attempt Score
126 out of 135 points
Time Elapsed
2 hours, 5 minutes out of 5 hours.

Question 1
3 out of 3 points

A bond with an annual coupon of $70 and originally sold at par for $1,000. The current market interest rate (yield to maturity) is 8%. This bond will sell at _______. Assuming no change in market interest rates, the bond will present the holder with capital ________ as it matures.
.
Answer

Selected Answer: B. discount; gains
Correct Answer: B. discount; gains

Question 2
3 out of 3 points

Given two comparable bonds A
…show more content…
Greater new jobless claims in the economy than expected.

Question 17
3 out of 3 points

Unsystematic risk:
.
Answer

Selected Answer: A. can be effectively eliminated through portfolio diversification.
Correct Answer: A. can be effectively eliminated through portfolio diversification.

Question 18
3 out of 3 points

The diversification effect of a portfolio of two stocks:
.
Answer

Selected Answer: D.
Both A and C.
Correct Answer: D.
Both A and C.

Question 19
3 out of 3 points

Irene Adler is considering investing in the common stock of Holmes and Watson. The following data are available for the two securities.
.
................... Expected Return ..... Standard Deviation
Holmes .............. 0.12 ......................... 0.08
Watson ............. 0.16 .......................... 0.20
.
If she invests 60% of her funds in Holmes and 40% in Watson, and if the correlation of returns between these two securities is 0.45, what is the portfolio’s expected return and standard deviation?
.
Answer

Selected Answer: B.
13.6% and 11.03%
Correct Answer: B.
13.6% and 11.03%

Question 20
3 out of 3 points

What does a security bring to the risk of a well diversified portfolio?
.
Answer

Selected Answer: B.
It brings its covariance with the other securities in the portfolio.
Correct Answer: B.
It brings its covariance with the other

Related

  • Fins 2643 Potential Questions
    2925 words | 12 pages
  • Lstd 207 Final Exam Answers
    3741 words | 15 pages
  • Is3340 Final Exam
    2313 words | 10 pages
  • BUS 475 Final Exam - SET 5 / 100% correct answers / A+
    2336 words | 10 pages
  • Acct 6273 Final Exam Acct6273 Final Exam
    1075 words | 5 pages
  • Hsa 520 Final Exam Solution 100% Correct Answer
    4125 words | 17 pages
  • Ifsm Final Exam
    2167 words | 9 pages
  • GOVT 2107 exam and final exam questions
    1331 words | 6 pages
  • Fins1612 Final Exam 2006
    4792 words | 20 pages
  • Multiple Choice Questions for Leadership Management
    14451 words | 58 pages