Question

Which of the following is not a type of call feature?

a. Deferred call

b. Noncallable

c. Discounted call

d. Freely callable

When compared with the market as a whole, a stock with a beta of 1.5 would be expected to

a. have greater price volatility.

b. have a higher expected return.

c. move pricewise in the same general direction as the market.

d. do all of these. All of the following are characteristics of common stock except a. returns to shareholders of common stock come from dividends and/or appreciation in share price. b. common stock has no maturity date and, as such, remains outstanding indefinitely. c. common stock represents equity or an ownership position in a company. d. companies are required to pay yearly dividends on their outstanding common stock. Which of the following investments is not among those most affected by interest rate risk? a. Bonds b. Preferred stock c. Common stock d. Notes A $1,000 par value bond has a 7.5% coupon, pays interest semiannually, and is currently selling for $900. The bond is selling at a. its conversion value. b. a premium. c. a discount. d. par value. The Securities Act of 1933 a. ensures full disclosure of information with respect to new securities. b. gives the SEC power to regulate securities markets. c. protects investors who own mutual funds. d. led to the creation of the National Association of Security Dealers. Preferred securities and convertible securities are similar in that they both a. are forms of hybrid securities. b. have the variable income benefits of a bond. c. are tax-deferred investments. d. have fluctuating dividend rates. To develop a successful investment program, it is essential that you first a. have sufficient savings so that you're not likely to have to cash in your investments when emergencies arise. b. be able to live within your budget so that the money you allocate for investments is not always being used for something else. c. have sufficient insurance to protect your assets, your family, and yourself against the unexpected. d. do all of these. In terms of total market value of all shares traded, the New York Stock Exchange is the biggest stock market in the world followed by a. the Tokyo stock market, the London market, and the Paris market. b. the American Stock Exchange, NASDAQ, and the Toronto stock exchange. c. the Tokyo stock market and then the NASDAQ market. d. the NASDAQ, the American Stock Exchange, and the Midwest Exchange (in Chicago).

Answer 1

As per rules I am answering the first 4 subparts of the question

1: discounted call

Deferred call provision restricts the issuer from calling the bond before a certain date. Noncallable bonds are those which are paid off only at maturity. A freely callable provision allows the bond to be called at any time.

2: have greater price volatility

Beta determines the extent of volatility of returns as compared to market as a whole. A beta higher than one implies that fluctuations are higher than the market. It does not determine the expected return rather measures the systematic risk. It differs from correlation that specifies the direction of price movement of the stock.

3: d

Common stock do not have any fixed dividend return and the dividends are paid at the discretion of the management. The other options are true of common stock.

4: d

Notes are not impacted by interest rate risk since they do not carry a fluctuating market price.Others are impacted by interest rate risk which impacts their prices.