# Finance for Everyone Markets Quiz

**Finance for Everyone Markets Quiz Answer. In this post you will get Quiz & Assignment Answer Of Finance for Everyone Markets Quiz**

## Finance for Everyone Markets Quiz

## Offered By ”McMaster University”

**Making a Difference in Week 1**

1.

Question 1

In this first week of Finance for Everyone: Markets, we have begun to explore some fundamental concepts (and stakeholders) that have tremendous influence over all financial markets.

Good |

**Week- 2 **

**Bonds**

1.

Question 1

Negative

interest rates could be motivated by:

1 point

a) Making money more expensive

b) Strengthening a national currency so that imports become cheaper

**c) ****Discouraging ****banks from hoarding money**

d) Keeping inflation in check

2.

Question 2

A typical

corporate bond’s coupon rate is quoted as a(n):

1 point

a) Effective annual rate (EAR)

b) Effective semi-annual rate

**c) Annual Percentage Rate (APR) or the stated rate compounded semi-annually**

d) Annual Percentage Rate (APR) or the stated rate compounded monthly

3.

Question 3

Which of the

following statements is true:

1 point

a) The current yield (Coupon /Price) is used interchangeably with the yield to maturity on a bond

b) Bonds selling at a discount trade below $5,000

**c) Bonds selling at a premium are quoted to trade above $100**

d) All bonds have a call feature

4.

Question 4

The main

lesson learned from the discussion about bonds includes

1 point

a) Bonds are a vital source of capital for governments and corporations

b) Low interest rates adversely affect Bondholders

c) Using up debt capacity can result in very difficult choices including bankruptcy

**d) All of the above**

5.

Question 5

A bond pays

a 10% coupon interest rate semi-annually

(or $50 every six months), and its face value is equal to $1,000. The annual yield to maturity is 12% (or 6%

semi-annually) and the bond has 8 years to maturity (16 semi-annual periods

till maturity). What is the market price of the bond today?

2 points

**a) The market price of the bond is about $899**

b) The market price of the bond is about $885

c) The market price of the bond is about $652

d) The market price of the bond is about $1,404

6.

Question 6

Bond A Bond B

Face Value $1,000 $1,000

Semi-annual Coupon $50 $70

Years to Maturity 10 10

Price $885.30 ?

If these bonds are identical except for coupons and

prices, what is the price of Bond B?

2 points

a) $ 802.89

b) $1,000.00

c) $1,023.11

**d) $1,114.70**

**Making a Difference in Week 2**

1.

Question 1

In this second week of F4E: Markets we looked at bonds – from their inception to present day – and the curious phenomenon of negative interest rates.

good |

**Week- 3**

**Stocks**

1.

Question 1

Which

of the following is not true about pricing stock?

1 point

A) The zero growth model assumes a

100% dividend payout ratio

**B) As the growth rate approaches the**

**stockholders required rate, the stock price decreases dramatically**

C) The non-constant growth model does

not include the current dividend paid in its price calculation

D) Multiples can price shares of

firms that do not pay dividends

E) Generally,

capital gains are taxed more favourably than dividends

2.

Question 2

Stockholders have the following

rights, except

1 point

A) to influence the governance of the

firm

B) to enjoy superior voting rights

(more than one-vote for one-share)

C) to receive cash and stock dividends

**D) to receive the par or face value ****on maturity**

E) to attend annual general meetings

3.

Question 3

The

Dow Jones Industrial Average Index

1 point

A) changes because one or more of its 500 stocks changes in value

B) is a reliable proxy for changes in the general global equity markets

**C) has companies selected by the ****editors of the Wall Street journal**

D) is more valuable than the S&P or the NASDAQ

E) decreases by 100 points suggests selling your Coca Cola stocks

4.

Question 4

Your new firm will pay all of its

earnings in dividends estimated to be $2 per year indefinitely, but this will

take 3 years. If your expected return is 10%, the price of your stock today is:

1 point

A) $20

B) $19.53

C) $18.18

D) $16.53

**E) $15.03**

5.

Question 5

A

firm just paid a dividend of $1.40 per share.

Sales and profits for the firm are expected to grow at a rate of 5% per

year indefinitely as is the dividend. If the required return is 10%, what is

the value of a share?

2 points

A) $14.00

B) $15.25

C) $25.80

D) $28.00

**E) $29.40**

6.

Question 6

If

your current dividend of $3 is expected to grow at 6% for the next two years

and then at 3% forever, and your required return is 16%, what is the price of

the stock?

1 point

**A) $25.09**

B) $25.82

C) $26.15

D) $27.58

E) $29.45

**Making a Difference in Week 3**

Good |

**Week- 4**

**Peer-graded Assignment: Presentation Assignment**