The future value of $200 received today and deposited at 8 percent


1) The future value of $200 received today and deposited at 8 percent for three years is ________.


B. $200



2) The riskiness of publicly traded bond issues is rated by independent agencies. According to Moody’s rating system, an Aaa bond and a Caa bond are ________ and________ respectively.

A. speculative; investment grade

B. prime quality; medium grade

C. medium grade; lowest grade

D. prime quality; speculative

3) A(n) ________ is a paid individual, corporation, or a commercial bank trust department that acts as a third party to a bond indenture.

A. bond rating agency

B. bond issuer

C. investment banker

D. trustee

4) The future value of an ordinary annuity of $2,000 each year for 10 years, deposited at 12 percent, is ________.

A. $11,300

B. $20,000

C. $39,310

D. $35,098

5) What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that matures in 6 years and pays 12 percent interest annually?

A. 12.0 percent

B. 9.3 percent

C.13.2 percent

D.8.5 percent

6) The future value of an annuity of $1,000 each quarter for 10 years, deposited at 12 percent compounded quarterly is ________.





7) ________ means that subsequent creditors agree to wait until all claims of the are senior debt satisfied before having their claims satisfied.

A. Security interest

B. Bond indenture

C. Subordination

D. Sinking fund requirement

8) The return expected from an asset is fully defined by its ________.

A. discount rate

B. cash flow and timing

C. risk and cash flow

D. beta

9)The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.

A. $285,000

B. $219,298

C. $178,571


10) Review Question? 6-12 and  6-13(LO6-6) Why is it important for financial managers to understand the valuation  process? What are the three key inputs to the valuation process?

11) The rate of return earned on an investment of $50,000 today that guarantees an annuity of $10,489 for six years is approximately ________.





12) $1,200 is received at the beginning of year 1, $2,200 is received at the beginning of year 2, and $3,300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is ________.

A. $ 6,700


C. $ 8,142

D. $17,072

13) The term structure of interest rates is the relationship between ________.

A. the maturity and rate of return for bonds with similar level of risk

B. the general expectation of inflation and nominal rate of return for bonds

C. the present value of principal and coupon rate of the bonds

D. the general expectation of inflation and real rate of return for bonds

14) The price of a bond with a fixed coupon rate and the required return have a relationship that is best described as  ________.

A. direct

B. inverse

C. constant

D. perfect positive correlation

15) The present value of $100 received at the end of year 1, $200 received at the end of year 2, and $300 received at the end of year 3, assuming an opportunity cost of 13 percent, is________.

A. $ 453

B.$ 416


D.$ 500

16) If a United States Savings bond can be purchased for $14.60 and has a maturity value at the end of 25 years of $100, what is the annual rate of return on the bond

A. 9 percent

B. 8 percent

C. 7 percent

D. 6 percent

17) The ________ feature permits the issuer to repurchase bonds at a stated price prior to maturity.

A. put

B. call

C. swap

D. conversion

18) A type of long term financing used by both corporations and government entities is ________.

A. retained earnings

B. common stocks

C. bonds

D. preferred stocks

19) ________ rate of interest is the actual rate charged by the supplier and paid by the demander of funds.

A. Nominal

B. Inflationary

C. Risk free

D. Real




Essay Help
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.