Exam (elaborations)
INV2601 Assessment 2 Semester 2 2022
- Institution
- University Of South Africa (Unisa)
This document contains suggested solutions & detailed explanations. For assistance call or
[Show more]
1 review
By: phathisananibutshingi • 1 year ago
Content preview
Question 1Correct
Mark 1.00 out of 1.00
Flag question
Question text
According to the liquidity preference theory, which of the following statements is least
accurate?
a.
All else equal, investors prefer short-term securities over long-term securities.
b.
Investors perceive little risk differential between short-term and long-term securities.
c.
Borrowers will pay a premium for long-term funds to avoid having to roll over short-
term. debt.
d.
Investors always prefer the higher liquidity of short-term bonds and any deviance from
an upward sloping yield curve is only temporary.
Feedback
Your answer is correct.
The correct answer is:
Investors perceive little risk differential between short-term and long-term securities.
Question 2
Correct
, Mark 1.00 out of 1.00
Flag question
Question text
Consider a 30 year, R1 000 semi-annual-pay bond with a 9% coupon and a 13.20% yield
to maturity. Based on a change in the yield to maturity of 1.20%, the effective duration of
the bond is closest to:
a.
3.84
b.
4.55
c.
7.67
d.
9.10
Feedback
Your answer is correct.
The correct answer is:
7.67
Question 3
Correct
Mark 1.00 out of 1.00
The benefits of buying summaries with Stuvia:
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
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller knowledgehut. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R50,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now