1. The compensation to investors for ______________________ is referred to as the liquidity premium.
acquiring a bond with an unfavorable tax status
purchasing a bond in the secondary market
redeeming a bond prior to maturity
the lack of an active market wherein a bond can be sold for its actual value
purchasing a bond that has defaulted on its coupon payments
2. Susan wants to have $1.2 million in her savings account when she retires. In order to reach this goal, she plans on investing a single lump sum today that she can earn 8 percent interest annually. Which of the following will require her to deposit a higher amount today for her retirement goal?
I. Retire later.
II. Retire sooner.
III. Invest in a different account paying a lower rate of interest.
IV. Invest in a different account paying a higher rate of interest.
II only
II and III only
I and III only
I and IV only
I only
10. ______________ are the distributions to shareholders by a corporation.
Net income
Diluted profits
Retained earnings
Dividends
Capital payments
11. The rate at which a stock's price is expected to appreciate is called ______________________.
total return
current yield
dividend yield
capital gains yield
coupon rate