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FCMB #2 Flashcards | StudBud
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FCMB #2
FCMB #2
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Answers
1
What type of bond allows the issuer the option to redeem the bond prior to maturity
Convertible
Vanilla
Callable
Reverse callable
2
A convertible bond with rate 5:1 and p=105 and stock p=489 is profitable
False
True
3
Comercial paper
Usually held by banks until maturity
Have no secondary market
Generally sold in small denomination of maximum 100,000
Sold to financial institutions indirectly through brokers
4
Zero coupon rates are called spot rates
True
False
5
BBB Bond is categorised as a speculative grade bond
True
False
6
What is the theoretical price knowing, a 4:1 conversion at issue price=1 and market price=1.8
1.16
0.16
0.86
1.64
7
Dividend yield is categorised as a entreprise value multiple
False
True
8
What's the ROR on a convertible bond, the ROR on a non convertible one is 0.6 the value of the conversion is 0.2
30
0.4
0.33
0.12
9
Common stock
Is only for public companies
Constitutes the capital of a company
Guarantees dividends to investors
Usually compensated through capital gains
10
STRIPS
Allow to hold interest and principal of notes/bonds as separate securities
Can be T-bills
None of the above
Are synthetic single payment debt instruments offered by non financial orgs
11
5 year annual 5% coupon bond with nom val 100€ and clean price 105€ time since last payment=123 days what's the dirty p
106.64
106.77
101.64
101.77
12
Capital markets are for debt instruments with maturity of more than 1 year
False
True
13
What's the typical denomination of a one week repo agreement
10M
100,000
5M
25M
14
Shelf registration
Is a prospectus that describes a new security issue
Allow the firm to offer multiple issues of stock over a two year period
Allow companies to register for an IPO
Allow the sale of one additional issue of shares within a 2 year period
15
What's the holding period return if:you buy 10 shares at p=55.1, you sell at 56.3 and collect 0.3 in dividends per share
2.72%
2.89%
2.18%
0.54%
16
Which doesn't represent Money market debt
Issued by high quality economic units that require short term funds
Little to no chance of principal loss
Low rates of return
Purchased by economic units that have excess long term funds
17
What is the value of preemptive rights with with a market price before issue of 545 and a theoretical price of 520
-25
1.038
25
0.963
18
The price of the bond with accrued interest is called dirty price
False
True
19
PEG ratio
The higher the bigger the dividend yield
A value investor seeks a low ratio but constant performance
The higher the better growth potential a stock has
Growth investors prefer stocks with low ratio
20
The Minimum denomination of italian bonds is 1000€
True
False
21
Which of the following isn't a value weighted index
Dow Jones index
S&P500
Wiltshire 5000
NYSE composite
22
Which type of bond has maturities between 1 to 10 years
None of the above
T-bills
T-notes
T-bonds
23
Scrip-issues
Increases a companies share capital and net assets
Is seen as an addition to dividend payouts
Increases the number of outstanding shares but decreases the stock price
Entail no increase or decrease in a company's cash reserve
24
What's the order of seniority when it comes to claims
Senior debt,mezzanine debt, subordinate debt, preferred stock, common stock
Senior debt,mezzanine debt, subordinate debt, common stock, preferred stock
Mezzanine debt,senior debt, subordinate debt, preferred stock, common stock
Senior debt,subordinate debt, mezzanine debt, preferred stock, common stock
