1. A market in which stock prices fully reflect all information that is available to investors is called
a. inefficient.
b. overvalued.
c. factored.
d. efficient.
2. Which of the following is true about MERs?
a. Mutual funds with lower MERs tend to outperform those with higher.
b. You need to subtract the MER from the posted return to figure out performance.
c. All types of mutual finds have similar MERs.
d. MERs only include manager and sales expenses.
3. What is the present value of $1000 to be received 15 years from today, assuming an interest rate of 6% per year?
a. $404.
b. $411.
c. $417.
d. $388.
4. Given the following ATT Ltd. bond information: $1000 par value, maturity 2023 Dec 22, semi-annual coupon 7.75 percent, price 105.50 and yield 7.4 percent. How much would a $1000 par value ATT Ltd. bond cost as of the day of this listing?
a. $105.50
b. $740
c. $1055
d. $1000
5. Which of the following bond mutual funds has both the lowest default risk and interest rate risk?
a. Short -term corporate
b. Short-term federal
c. Short-term high-yield
d. T-bill