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FIN 301 FINAL EXAM 2024/2025 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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FIN 301 FINAL EXAM 2024/2025 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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FIN 301 FINAL EXAM 2025/2024FIN 301 FINAL EXAM 2024/2025 VERIFIED
QUESTIONS AND ANSWERS GRADED
A+(SOLVED)
In CAPM, the expected return on a stock is directly related to its _____?
A. Alpha
B. Beta
C. Interest Rate
D. WACC
E. All of the above
B
Which of the following is true about bonds?
A. The longer the maturity of the bond, the higher the interest rate risk
B. There is a positive relationship between market interest rate movements and
bond prices
C. The lower the default risk on the bond, the higher the yield of the bond
D. A decrease in market interest rate will decrease bond prices
E. Bonds prices are not affected by prepayment risk
A
,FIN 301 FINAL EXAM 2025/2024
What is the tax-equivalent yield of the following municipal bond? Price: $1,000
Coupon Rate: 7.0% Federal tax rate: 30% Maturity: 15 years
A. 5.4%
B. 9.1%
C. 10.0%
D. 7.0%
E. 23.1%
C
If there are two non-callable $1,000 bonds that pay semi-annual interest, one with a
15-year maturity and the other with a 30-year maturity and both with a coupon rate
of 8%, what will happen to their values if market interest rate rises to 12%?
A. The value of the 15-year bond will be $47.93 higher than the 30-year bond
B. The value of the 30-year bond will be $47.93 higher than the 15-year bond
C. The value of the 15-year bond will be $49.77 higher than the 30-year bond
D. The value of the 30-year bond will be $49.77 higher than the 15-year bond
E. Their values will be the same because their coupon rates are the same
A
Which of the following statements is false:
, FIN 301 FINAL EXAM 2025/2024
A. Poor profits for a firm can negatively affect its stock price
B. A firm's profits and market value have a direct relationship
C. A stock's value depends most on interest rates, profits, and risks
D. The market value of a company is total market value of its assets
E. A public company's market value is calculated by multiplying the shares
outstanding by its current market stock price
D
If you bought a stock for $50 and sold it for $60 after a year, you also received a
quarterly dividend of $2.00 throughout the year. What was the rate of return you
received over the year?
A. 24.0%
B. 30.0%
C. 36.0%
D. 42.0%
E. 48.0%
C
Shawn currently owns Stock Z and wants to diversify his portfolio to reduce his
exposure to unsystematic risk. Given the correlation of Stock Z with the following
stocks, which stock should he own along with Stock Z? A. Stock A:
Correlation=1.0
B. Stock B: Correlation=0.10
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