1. Given a $1000 face value corporate bond having a current price of $800, matures in 5 years. If interest is paid semi-annually and the bond is priced to yield 8% annually, what is the bond's coupon rate?

a) 3.03% Annually

b) 1.77% semi annually

c) 2.8% annually

d) 1.53% semi annually

2. You are provided with the following information for a bond, and a discount rate of 13% is relevant, what is the duration for the bond?

Bond Duration = PVF*CF*t

PVF*CF

Year Cash Flow

1 $105

2 105

3 105

4 105

5 105

5 $1,000

a) 3.05 years

b) 4.45 years

c) 4.09 years

d) 2.35 years

3. Given a $1000 face value corporate bond having a current price of $800, matures in 5 years. If interest is paid semi-annually and the bond is priced to yield 8% annually, what is the bond's coupon rate?

a) 3.03% Annually

b) 1.77% semi annually

c) 2.8% annually

d) 1.53% semi annually

4. Stars Ltd, being a local company and engaging is agricultural products, is maintaining a constant growth rate. Its last dividend that was paid yesterday was $2.00, and the dividend is expected to grow indefinitely at a 6 percent rate. What is the firm's expected dividend stream over the next 3 years?

a. $2, $2.06 & $2.12 respectively

b. $2.06, $2.12 & $2.25 respectively

c. $2.12, $2.25 & $2.38 respectively

d. $2.25, $2.38 & $2.52 respectively

5. Stars Ltd, being a local company and engaging is agricultural products, is maintaining a constant growth rate. Its last dividend that was paid yesterday was $2.00. The required rate of return is 13%. What would the stock price be if its dividends were expected to have zero growth?

a) $12.68

b) $15.38

c) $16.12

d) $12.25

6. Stars Ltd, being a local company and engaging is agricultural products. Its last dividend that was paid yesterday was $2.00. Suppose Stars ltd.'s stock dividends are expected to experience zero growth during the first 3 years and then to resume its steady-state growth of 6 percent in the fourth year and onwards. What is the stock's value now?

a) $24.28

b) $22.13

c) $25.72

d) $22.14

7. The unit labor cost is .................. related to the profit margin..

a) Positively

b) Negatively

c) Exponentially

d) Marginally

10. ..........................is risk that influences a large number of assets.

a) Systematic risk

b) Portfolio risk

c) Aggregate risk

d) Unsystematic risk

8. Total risk involved in stock market investment is;

a. Systematic risk - Unsystematic risk

b. Systematic risk + Unsystematic risk

c. Systematic risk x Unsystematic risk

d. Systematic risk / Unsystematic risk