Yield curve 11. Does the yield curve depicted in the previous question (change in rates per consecutive year) indicate a generally positive or negative investor sentiment about the bond market. A. Generally negative as yield is decreasing at an increasing rate. B. Generally positive as yield is increasing at a decreasing rate. C. Generally negative as yield is decreasing at a decreasing rate. D. Generally positive as yield is increasing at an increasing rate. EQUITY Buying/selling 12. You would like to sell you shares in Apple. The current price is $120.00/share. You place the following order with your broker: buy 200 shares. What kind of order have you placed? A. Market order B. Limit order C. Stop order D. Stop limit order 13. You would like to sell you shares in Apple. The current price is $120.00/share. You place the following order with your broker: if the price hits $115.00 then sell 200 at or above $113 and another 200 at or above $111. What kind of order have you placed? A. Market order B. Limit order C. Stop order D. Stop limit order 14. Based on the information in the previous question, if the last bid is for 300 shares@ $113 how many shares will you sell? A. 100 B. 200 C. 300 D. 400 15. You and your partner own all 1,000 shares in your company. A new, 3rd partner will invest in the company. She will own 20 % of the shares after the purchase. She will pay $500,000 for her 20 % interest. What is the whole company worth (all 100 % of the equity)? A. $2,500,000 B. $500,000 C. $250 D. $1,000,000 B. No 8 In an equity prospectus 2 important sections are? A. Proceeds to selling shareholders, covenants B. Use of proceeds, proceeds to selling shareholders C Covenants, events of default D. Selling shareholders, guarantees Bond valuation -Interest rates -Spreads U.S. Treasury bond yields are as follows: 3.3% for Treasuries due 2014 3.4% for Treasuries due 2015 3.5% for Treasuries due 2016 3.6% for Treasuries due 2017 3.7% for Treasuries due 2018 9. GE bonds due 2018 trade at a yield of 7.9 %. What is the spread to comparable treasury for the GE bond? A. 200 basis points B. 400 basis points C. 280 basis points D. 420 basis points 10. Wal-Mart bonds due 2017 trade at a yield of 4.7 %. What is the spread to comparable treasury for the Wal-Mart bond? A. 110 basis points B. 410 basis points C. 230 basis points D. 320 basis points