1. Firms with relatively low fixed operating costs and high variable operating costs can best be described as having:
a. a high degree of operating leverage
b. a low degree of operating leverage
c. a normal degree of operating leverage
d. no operating leverage
2. If the yield-to-maturity of a bond is less than the coupon rate, the bond will sell at:
a. a discount
b. a premium
c. par value
d. its call price
3. If the yield-to-maturity of a bond is more than the coupon rate, the bond will sell at:
a. a discount
b. a premium
c. par value
d. its call price
4. A zero-coupon bond will have a price:
a. equal to par
b. less than par
c. greater than par
d. equal to the market rate