problem1: Determine which one of the following rates is the best measure of the raised purchasing power you can realize from a bond investment?
[A] Real rate
[B] Yield to maturity
[C] Yield to call
[D] Current yield
[E] Nominal rate
problem2: A deep discount bond that pays no regular interest payment is called a (an) ___ bond
[A] Zero coupon
[B]Convertible
[C] But
[D]Exotic
[E] Income
problem3: Winslow and Daughters just paid their yearly dividend of $2.2 a share. They recently announced that all future dividends will increase by 2% yearly. What is one share of this stock worth to you if you require a 14% rate of return?
[A] $18.14
[B] $18.70
[C] $18.87
[D] $18.27
[E] $18.33
problem4: A stock pays a $.80 dividend and has a market price of $20.40 a share. find out the dividend yield?
[A] 2.14
[B] 3.26
[C] 3.92
[D] 1.63
[E] 1.96
problem5: Which one of the following bonds tends to be the most interest rate sensitive?
[A] A 5-year, zero coupon bond
[B] A 1-year, zero coupon bond
[C]A 1-year, 9% coupon bond
[D] A 20-year, zero coupon bond
[E] A 20-year, 9% coupon bond