Expected Dividend
Dividend Paid x (1+Constant Growth Rate Decimal)
Intrinsic Value
Expected Dividend / (Required Return - Constant Growth Rate Decimal)
The yield on an AAA rated bond will be ________ than a BB rated bond.
Lower
Interest rates on medium-term maturities are________ than rates on long and short term maturities.
Higher
If Inflation is expected to decrease in the future then the Treasury Yield curve is ___________
Downward Sloping
The yield on new bonds issued by a leveraged firm will be ________
More than the yield on the new bonds issued by an unleveraged firm.
The yield for an AA rated corporate bond is expected to be _________
Above the U.S. Treasury bond yield curve.
Yield curves of highly liquid assets will be lower than yield curves of radiatively illiquid assets?
True
If the pure expectations theory is correct, future short-term rates are expected ________
To be higher than current short-term rates.
A certificate of deposit for two years will ________
Have the same yield as a CD for one year followed by an investment in another one-year CD after one year.
What three facts are true about economics?
If the demand for Treasury bonds increase, it will lead to a rise in their price and a decline in their yield.
Countries with strong balance sheets and declining budget deficits tend to have lower interest rates.
The Federal reserve is limited to use mone
Corporate bonds are generally denominated and have a face or maturity value of ________
1,000$
What is the contract that describes of borrowing between a firm and the bond issued to its investors?
Indenture
When an issuer is prevented from calling a portion of the issue for years?
Deferred
Which bonds allow you to sell them at a specified price at certain dates before maturity? and when the inflation rate increases, so does the interest on the bonds?
Putable Bond
Purchasing Power Bonds
What has a higher Interest Rate Risk?
Long-Term Securities