Exam 2: Asset Classes and Financial Instruments

In order for you to be indifferent between the after-tax returns on a corporate bond paying 8.5% and a tax-exempt municipal bond paying 6.12%, what would your tax bracket need to be

In the event of the firm's bankruptcy

Which of the following is true regarding a firm's securities

An investor purchases one municipal and one corporate bond that pay rates of return of 8% and 10%, respectively.If the investor is in the 20% marginal tax bracket, his or her after-tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.

Deposits of commercial banks at the Federal Reserve Bank are called

The type of municipal bond that is used to finance commercial enterprises such as the construction of a new building for a corporation is called

The Dow Jones Industrial Average and the New York Stock Exchange Index have unique characteristics.Discuss how these indices are calculated and any problems/advantages associated with the specific indices.

Treasury Inflation-Protected Securities (TIPS)

Federally sponsored agency debt

The ____ index represents the performance of the Canadian stock market.

Which of the following securities is a money market instrument

With regard to a futures contract, the long position is held by

A call option allows the buyer to

A 5.5% 20-year municipal bond is currently priced to yield 7.2%.For a taxpayer in the 33% marginal tax bracket, this bond would offer an equivalent taxable yield of

Which of the following indices is(are) market-value weighted I. The New York Stock Exchange Composite Index II. The Standard and Poor's 500 Stock Index III. The Dow Jones Industrial Average

You sold a futures contract on corn at a futures price of 350 and at the time of expiration the price was 352.What was your profit or loss

The money market is a subsector of the

Corporations can exclude ____________% of the dividends received from preferred stock from taxes.

The largest component of the bond market is _______ debt.

Consider the following three stocks: The value-weighted index constructed with the three stocks using a divisor of 100 is