6. According to efficient market hypothesis, if markets are semi-strong efficien

Question

6. According to efficient market hypothesis, if markets are semi-strong efficient, investors may consistently earn abnormal returns by relying on A. Past price trends. B. Analysis of public company financial statements. C. Insider private information. D. Both public and private information. which of the following bonds, selling at a yield of 6%pa, has the greatest interest rate risk? A. 20 year bond with 10% coupon rate. B. 20 year bond with 5% coupon rate. C. 15 year bond with 5% coupon rate. D. 20 year zero coupon bond. 7, Which of the following is NOT a cause of the Global Financial Crisis (GFC)? A. High interest rates in the lead up to 2007. B. Easy availability of mortgage loans. C. Mortgages being on-sold by banks rather than being retained on their books D. The increasing complexity and lack of transparency regarding financial instruments 8. 9. To repay a debt, Melanie agreed to pay $1,000 on each 1st July from 1st July 2005 to 1st July 2014 inclusive (10 payments). However, no repayments have been made. What single payment should Melanie pay on 1st July 2016 to repay the whole debt? Interest is 6.5% p.a. (effective rate). A. $14,371.56 B. $15,305.71 C. $16,300.58 D. $9,005.56 10. A company issues $10 million in preference shares which each have a $50 par value and offer a dividend of 6% of par each year, in perpetuity The share was issued at $49.00. The required annual rate of return of investors was closest to: A. 6.00% B. 12.25% C. 12.24% D. 6.1296

Explanation / Answer

6. C. insider private information

7. 20 year zero coupon bond

8. high interest rates in the lead up to 2007

9. N = 10, PMT = 1000, PV = 0, rate = 6.5%

use FV funxtion in Excel and multiply by 1.065*1.065

amount = 15,305.71

10.

required rate of return = 6% of 50/49 = 6.12%

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.