1. A RM1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in 3 years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond?

a.

RM1,008.18

b.

RM949.60

c.

RM948.01

d.

RM1,005.26

2. Stock rights provide the stockholder with ________.

Select one:

a.

cumulative voting privileges over the preference stockholders

b.

the opportunity to receive extraordinary earnings

c.

the right to purchase additional shares in direct proportion to their number of owned shares

d.

the right to elect the board of directors

3. The 8 percent, RM1,000 face value bonds of Glenmore Foods are currently selling at $1,027. These bonds have 16 years left until maturity. What is the current yield?

a.

7.71 percent

b.

8.23 percent

c.

7.79 percent

d.

8.28 percent

e.

8.00 percent

4. You want to invest in a stock that pays RM3.50 annual cash dividends for the next six years. At the end of the six years, you will sell the stock for $22.50. If you want to earn 12.5% on this investment, what is a fair price for this stock if you buy it today?

a.

about RM25.29

b.

about RM12.45

c.

about RM25.94

d.

about RM14.25