Answered: All of the following may serve to…

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 9Q: In Chapter 7, we saw that if the market interest rate, rd, for a given bond increased, the price of...

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6. All of the following may serve to reduce the coupon rate that would otherwise be required on a bond issued
at par, except a

a.Sinking fund.
b.Restrictive covenant.
c.Call provision.
d.Change in rating from Aa to Aaa.
e.None of the above (all may reduce the required coupon rate).

7. The New York Stock Exchange is primarily
a.A secondary market.
b.An organized auction markets.
c.An over-the-counter market.
d.Answers a and b above are both correct.
e.Answers b and c above are both correct.

8. Money markets are markets for
a.Foreign currency exchange.
b.Consumer automobile loans.
c.Corporate stocks.
d.Long-term bonds.
e.Short-term debt securities.

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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