1 / 31
What is worth more than an annuity of $100 monthly payments?
Click the card to flip 👆
Terms in this set (31)
A note is generally defined as:An unsecured bond with an initial maturity of 10 years or less.A deferred call provision:Prohibits the bond issuer from redeeming callable bonds prior to a specified date.A "fallen angel" is a bond that has moved from:Investment grade to speculative grade.Last year, you purchased a TIPS at par. Since that time, both market interest rates and the inflation rate have increased by .25 percent. Your bond has most likely done what since last year?Maintained a fixed real rate of return.A bond that has only one payment, which occurs at maturity, defines which one of these types of bonds?Zero couponThe difference between the price that a dealer is willing to pay and the price at which he or she is willing to sell is called the:SpreadThe Fisher effect primarily emphasizes the effects of ________ on an investor's rate of return.InflationThe pure time value of money is known as the:Term structure of interest rates.Which risk premiums compensate for the inability to easily resell a bond prior to maturity?LiquidityWhat bond would you generally expect to have the highest yield?Long-term, taxable junk bondNational Trucking has paid an annual dividend of $1 per share on its common stock for the past 15 years and is expected to continue paying a dollar per share long into the future. Given this, one share of the firm's stock is:Priced the same as a $1 perpetuity.The dividend growth model:Requires the growth rate to be less than the required return.Stocks can have ______ growth rates.NegativeThe two-stage dividend growth model evaluates the current price of a stock based on the assumption a stock will:Grow at a fixed rate for a period of time after which it will grow at a different rate indefinitely.Boston Free Press has a dividend policy whereby the firm pays a constant annual dividend of $2.40 per share of common stock. The firm has 1,000 shares of stock outstanding. The company:Must still declare each dividend before it becomes an actual company liability.Which stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings?CommonThe secondary market is best defined as the market:Where outstanding shares of stock are resold.A person on the floor of the NYSE who executes, buy, and sell orders on behalf of customers is called a:Floor brokerThe stream of customer orders coming in to the NYSE trading floor is called the:Order flowNYSE designated market makers:Act as dealersWhat best describes Nasdaq?Computer network of securities dealers.