Investors in corporate zero-coupon bonds include all of the following EXCEPT: A: Tax-exempt retirement plans B: Conservative investors who want to lock-in their returns C: Investors who are saving for their children's college education D: Investors who do not need current cash flows E: All of the above are potential zero-coupon investors
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Investors in corporate zero-coupon bonds include all of the following EXCEPT: A: Tax-exempt retirement plans B: Conservative investors who want to lock-in their returns C: Investors who are saving for their children's college education D: Investors who do not need current cash flows E: All of the above are potential zero-coupon investors
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- In regards to considering investment, if an investor is of a high income bracket, what kind of bond would he/she almost always be better off investing in? investment, treasury, corporate, or tax-free municipal bond?When you invest your money, you want to avoid risk at all cost. Which type of investment would you MOST likely choose? O a) small-company stocks b) large-company stocks c) corporate bonds 0 d) Treasury billsPlace each preference in the appropriate category based on whether you are better off investing in stocks or bonds. Stocks You want a guaranteed, regular payment from your investment. You want a high return and are not concerned about risk. Answer Bank Bonds You are worried about losing money if a company declares bankruptcy. You want to participate in the management of companies you invest in.
- 1) You want to invest your money in the safest way possible (i.e., your only objective is minimizing the likelihood of losses). Which instrument of the ones listed below should you choose for your investment? (Choose just one.) a) AAA-rated corporate bond b) BBB-rated corporate bond c) Treasury bill d) Convertible bond e) Broad-based market index f) Stock in a low-volatility firm g) Well-diversified portfolio consisting of stocks, bonds, and real estate h) Cook county bond Focus MacBook ProWould you expect a typical open-end fixed-income mutual fund to have higher or lower operating expenses than a fixed-income unit investment trust? Why?When Tory invested in a mutual fund composed of bonds, her primary risk is that the bonds held by the mutual fund could ______________, which occurs when a company borrows money through the issuance of debt securities and does not pay either the interest or the principal. fluctuate withhold dividends default split stabilize
- Think from the borrower (management) and NOT lender (investor) points of view. Which is the less risky financial instrument? O bond financing O stock financing O bank loans venture capital fundingMark buys a financial asset from the DBA. This financial asset is an instrument of short term borrowing. He hasbought it because he doesn’t want to take risk and wants an assured return. This instrument is promissory note. It ishighly liquid. The instrument is also known as zero coupon bonds. On this instrument it is written T-91. Based onthe above case study, answer the following:a. Which financial asset is indicated in the above case?b. On whose behalf does the DBA issue this instrument?c. Why is this instrument called as the zero coupon bond?d. What does T-91 denote here?e. What is the minimum amount for which this instrument bond?Which of the following statements about sinking fund is NOT true? A Sinking fund provision facilitates the orderly retirement of the bond issue. B A company would prefer to use sinking fund to call bond if interest rate is below the coupon rate. C A company would use sinking fund to call bond if interest rate is well above coupon rate. D It is a good strategy for a firm to use its sinking fund to call bond if bond sells at a big premium.
- Investors have no control over ________________ distributions when investing in mutual funds. a) capital gain b) domestic yields c) inflationary1 . Which investor type would most likely have high tolerance for risk, long investment horizon, and low liquidity needs? a) pension funds b) commercial banks c)individuals d) mutual funds 2. Which manager most likely receives the highest compensation through fees? a) passive manager b) fixed income asset manager c) smart beta manager d) alternative asset manager 3. A no-load mutual fund will most likely charge which of the following fee? a) redemption fee b) up front fee c) management fee d) all of the above 4. The diversification between any two assets most likely to occur when which of the following conditions is met? a) Correlation between the two assets is less than 1.0 b) Correlation between the two assets is greater than 1 c) Correlation between the two assets is strictly negative d) Correlation between the two assets is strictly zero 5. When the economy is at the lowest point of the business cycle (the "through"), which are the best industries to invest in? a) Cyclical…What are some comparative advantages of investing in the following?a. Unit investment trusts.b. Open-end mutual funds.c. Individual stocks and bonds that you choose for yourself.