Financial Instruments Paper 1

1

A curve on a graph with the rate of return on the vertical axis and time on the horizontal axis depicts






2

A downward-sloping yield curve depicting the term structure of interest rates implies that






3

Short-term interest rates are






4

Which of the following scenarios would encourage a company to use short-term loans to retire its 10-year bonds that have 5 years until maturity?






5

The term “underwriting spread” refers to the






6

Which one of the following characteristics distinguishes income bonds from other bonds?






7

From an investor’s viewpoint, the least risky type of bond in which to invest is a(n)






8

Serial bonds are attractive to investors because






9

If Brewer Corporation’s bonds are currently yielding 8% in the marketplace, why is the firm’s cost of debt lower?






10

Debentures are






Result

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