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Midterm 2023

This document contains a final exam for a Principles of Finance course, including: - A multiple choice section with 10 questions worth 5 points each on topics like liquidity, bond yields, and primary/secondary markets. - Three written questions asking students to calculate bond prices based on yield to maturity, monthly loan payments and amounts over time at a given interest rate, and bond equivalent yields on Treasury bills. - Instructions for students to provide their name, student ID, and class code before beginning the multiple choice and written responses. The exam is designed to take 40 minutes to complete.

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k61.2212155032
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29 views

Midterm 2023

This document contains a final exam for a Principles of Finance course, including: - A multiple choice section with 10 questions worth 5 points each on topics like liquidity, bond yields, and primary/secondary markets. - Three written questions asking students to calculate bond prices based on yield to maturity, monthly loan payments and amounts over time at a given interest rate, and bond equivalent yields on Treasury bills. - Instructions for students to provide their name, student ID, and class code before beginning the multiple choice and written responses. The exam is designed to take 40 minutes to complete.

Uploaded by

k61.2212155032
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FOREIGN TRADE UNIVERSITY FINAL EXAM QUESTIONS

HCMC CAMPUS PRINCIPLES OF FINANCE - TCH302


_________________________________
Department of Business
Administration, Finance & Semester: 2 Academic year: 2022 – 2023
Accounting Full time/Part time: Full time
_________________________
Class code:
PAPER NO.:1 Form of Exam: Writen and Multiple choice
Duration: 40 minutes

________________________

SECTION A. MULTIPLE CHOICE (50 points)


Full name:
……………………………………………………………………………….

Student ID: ……………………….…………………………………………

Class code: ………………………………………………………………….

SECTION B. WRITTEN (50 points)

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SECTION A. MULTIPLE CHOICE


Each question is worth 5 points.
1. To say an asset is liquid implies that:
a. we are focusing on a category of assets that are in a physically liquid form, like oil.
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b. we are considering assets that may be readily converted into a means of payment.
c. we are considering any asset that can be sold.
d. we are only considering U.S. currency.
e. None of the above
2. An important financial institution that assists in the initial sale of securities in the primary
market is the _________.

a. investment bank. d. stock exchange.


b. brokerage house. e. None of the above
c. commercial bank.
3. The dollar amount of the yearly coupon payment expressed as a percentage of the face
value of the bond is called the bondʹs ______.
a. coupon rate. d. payment rate.
b. maturity rate. e. None of the above
c. face value rate.
4. The yield to maturity is ________ than the ________ rate when the bond price is
________ its face value.
a. greater; coupon; above d. less; perpetuity; below
b. greater; coupon; below e. None of the above
c. greater; perpetuity; above
5. Which of the following are true for a coupon bond?
a. When the coupon bond is priced at its face value, the yield to maturity equals the
coupon rate.
b. The price of a coupon bond and the yield to maturity are positively related.
c. The yield to maturity is greater than the coupon rate when the bond price is above the par
value.
d. The yield is less than the coupon rate when the bond price is below the par value.
e. None of the above
6. A monthly interest rate of 1% is a compounded annual rate of:
a. 12.68% d. 6.00%
b. 10.00% e. None of the above
c. 14.11%
7. Which of the following is likely to be a primary financial market transaction?
a. You cash the check your grandmother sent you for your birthday.
b. You call a broker and purchase bonds for your retirement fund.
c. A city issues bonds to finance new road construction.
d. A supermarket needs to borrow the funds for a second location and takes out a loan from a
commercial bank to pay for it.
e. None of the above.

8. A financial intermediary ______.


a. is an agency that guarantees a loan.
b. is a third-party that facilitates a transaction between a borrower and a lender.
c. would be used in direct finance.
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d. must be a depository institution.
e. None of the above.

9. Your parents are giving you $100 a month for four years while you are in college. At a
6% discount rate, what are these payments worth to you when you first start college?
a. $346.51 d. $25,656.45
b. $4,258.03 e. None of the above.
c. $1,565
10. In reading bond quotes:
a. the bid price is usually above the asked price.
b. the asked price is fixed over the life of the bond.
c. the asked price is usually above the bid price.
d. bid and asked prices must be equal as set forth by SEC regulations.
e. None of the above.
SECTION B. WRITTEN
11. Your company is about to issue a bond with annual coupon payments, a coupon rate of
6.5% and the face value of $1,000. The yield to maturity for this bond is 6.9%. What is
the bond price if it matures in ten years?
12. You have a 10 years loan outstanding. It requires making monthly payments, starting at
the end of the month. The loan amount is 5 billion VND and the interest rate on the loan
is 12%.
a. Compute the monthly payment (
b. What is the payoff amount if you decided to pay off the mortgage immediately after the
12th payment is made. (
13. Calculate the bond equivalent yield and effective annual return on T-bill that are 28 days
from maturity and have a quoted yield of 0.25 percent
--------------------------------------End of test--------------------------------------

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