Exam 3 practice exam - Chris Lynch PDF

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Chris Lynch...

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https://quizlet.com/405889618/finc-final-flash-cards/ https://quizlet.com/406297866/flashcards *All else held constant, present value of a bond increases when the YTM decreases What makes price of bond increase → YTM decreases and vice versa ●

which one of the following represents the amount of compensation an investor should expect to receive for accepting unsystematic risk associated with individual security? (exact problem on test) Zero

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which one of these represents systematic risk? (exact problem on test) Increase in consumption created by a reduction in personal tax rates

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Assume firm has beta of 1.2. All else held constant, cost of equity for this firm will increase if the risk free rate decreases (exact problem on test)

Practice Exam 1. Current Yield= Annual interest/current market price 2. Real rate of return has been adjusted for inflation 3. Treasury yield curve plots yield on treasury notes and bonds relative to the maturity

(yield % X-axis, maturity Y-axis) 4. Taxability premium=paid on corporate bond due to its tax status 5. YTM...