100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Investment Management Iowa Exam 1 Question and answers 100% correct 2024 £11.70   Add to cart
Quickly navigate to
Preview
  2.  
  3. Lowa
  4.  
  5. Lowa

Exam (elaborations)

Investment Management Iowa Exam 1 Question and answers 100% correct 2024

 8 views  0 purchase
  • Module
  • Lowa
  • Institution
  • Lowa

Investment Management Iowa Exam 1 Question and answers 100% correct 2024 Investment Management Iowa Exam 1 A 20 year maturity bond with par value of $1,000 makes semiannual coupon payments at an annual coupon rate of 8%. Find the bond equivalent and effective annual yield to maturity of the bond...

[Show more]

Preview 3 out of 16  pages

Document information

  • August 30, 2024
  • 16
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • investment management iowa exam 1
  • investment management iowa exam 1 question and ans

Written for

  • Lowa
  • Lowa

Seller

avatar-seller
Academia199

Reviews received

Content preview

Investment Management Iowa Exam 1
A 20 year maturity bond with par value of $1,000 makes semiannual coupon
payments at an annual coupon rate of 8%. Find the bond equivalent and
effective annual yield to maturity of the bond if the bond price is :
a. $950
b. $1,000
c. $1,050 - correct answer ✔a.
Par value: 1000
PV: 950
Coupon rate:8%
Years:20
Interest Rate: =rate(20*2,(8%*1000)/2,-950,1000)
Bond equivalent: (Interest rate *2)
Effective Yield: (1+Interest rate)^2-1


a. Bond equivalent: 8.53%
Effective Yield: 8.71%
b.Bond equivalent: 8.00%
Effective Yield: 8.16%
c. Bond equivalent: 7.51%
Effective Yield: 7.65%


Which of the following is an example of an agency problem?


- Mangers over-consume luxuries such as corporate jets
- Managers engage in empire building

,- Managers protect their jobs by avoiding risky projects
- All of the above - correct answer ✔All of the above


The value of a derivative security _________.


- affects the value of a related security
- depends on the value of another security
- is unrelated to the value of another security - correct answer ✔depends on
the value of another security


An order to buy or sell a security at the current price is a ______________.


- limit order
- stop-loss order
- market order
- stop-buy order - correct answer ✔market order


Mutual funds provide the following for their shareholders


- diversification
- professional management
- recordkeeping and admin
- all of the above - correct answer ✔All of the above


Underwriting is one of the services provided by _____.

, - the SEC
- investment bankers
- publicly traded companies
- FDIC - correct answer ✔investment bankers


Risk that can be eliminated through diversification is called ______ risk.


- unique
- firm-specific
- diversifiable
- all of the above - correct answer ✔All of the above


Adding additional risky assets to the investment opportunity set will generally
move the efficient frontier _____ and to the ______.


- up;right
- up;left
- down;right
- down; left - correct answer ✔up;left


A portfolio is composed of two stocks, A and B. Stock A has a standard
deviation of return of 35%, while stock B has a standard deviation of return of
15%. The correlation coefficient between the returns of A and B is 0.45. Stock
A comprises 40% of the portfolio, while stock B comprises 60% of the
portfolio. The standard deviation of the return for this portfolio is
_____________.


- 23%

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Academia199. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £11.70. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

81113 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£11.70
  • (0)
  Add to cart