1. A loan has an APR of 6.5% and an EAR of 6.5%. Given this, the loan must:
have a one-year term.
have a zero percent interest rate.
charge interest monthly.
charge interest annually.
2. Which of the following statements is most correct?______
Common stockholders have claim priority over preferred stockholders.
A big advantage of preferred stock is that preferred stock dividends are tax deductible for the issuing corporation.
preferred stockholders have claim priority over common stockholders.
None of the above statements is correct.
3. Other things held constant, for a given change in the market interest rate, the _______the time to maturity of bond, the the change in the bond price.
longer; larger.
shorter; larger.
longer; smaller.
None of the answers above is correct.