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Question 182  NPV, IRR, pay back period

A project's NPV is positive. Select the most correct statement:



Question 233  bond pricing

A four year bond has a face value of $100, a yield of 9% and a fixed coupon rate of 6%, paid semi-annually. What is its price?



Question 309  stock pricing, ex dividend date

A company announces that it will pay a dividend, as the market expected. The company's shares trade on the stock exchange which is open from 10am in the morning to 4pm in the afternoon each weekday. When would the share price be expected to fall by the amount of the dividend? Ignore taxes.

The share price is expected to fall during the:



Question 392  real option, option

An abandonment option is best modeled as a or option?


Question 564  covariance

What is the covariance of a variable X with a constant C?

The cov(X, C) or ##\sigma_{X,C}## equals:



Question 617  systematic and idiosyncratic risk, risk, CAPM

A stock's required total return will increase when its:



Question 784  boot strapping zero coupon yield, forward interest rate, term structure of interest rates

Information about three risk free Government bonds is given in the table below.

Federal Treasury Bond Data
Maturity Yield to maturity Coupon rate Face value Price
(years) (pa, compounding annually) (pa, paid annually) ($) ($)
1 0% 2% 100 102
2 1% 2% 100 101.9703951
3 2% 2% 100 100
 

 

Based on the above government bonds' yields to maturity, which of the below statements about the spot zero rates and forward zero rates is NOT correct?



Question 824  option, no explanation

A put option written on a risky non-dividend paying stock will mature in one month. As is normal, assume that the option's exercise price is non-zero and positive ##(K>0)## and the stock has limited liability ##(S>0)##.

Which of the following statements is NOT correct? The put option's:



Question 898  comparative advantage in trade, production possibilities curve, no explanation

Adam and Bella are the only people on a remote island. Their production possibility curves are shown in the graph.

Assuming that Adam and Bella cooperate according to the principles of comparative advantage, what will be their combined production possibilities curve?



Question 921  utility, return distribution, log-normal distribution, arithmetic and geometric averages, no explanation

Who was the first theorist to propose the idea of ‘expected utility’?