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1) In strong expanding economy, interest rates are increasing upwards. Why may the yield on BBB-rated bond rise LESS than yield on the Treasury bond of similar maturity? What affects spread between BBBs and Treasuries?

2) You are considering the investment in either individual stocks or the portfolio of stocks. Two stocks you are researching, stocks A and B, have given historical returns:

 Year    RA        RB
2009   -20%   -5%
2010    42%    15%
2011    20%   -13%
2012    -8%     50%
2013    25%    12%

Compute the standard deviation of returns for each stock and for portfolio.

3) If you were the commercial credit analyst charged with responsibility of making the accept/reject decision on loan request of company, with which financial statement would you be most worried? Which financial statement is most probable to give pertinent information about the company’s ability to repay its debt?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914233

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