Financial Questions…need assistance.?

August 15, 2010 1 Comment

1. The interest rate that measures the true interest rate when compounding occurs more frequently than once a year is called the:
a. annual percentage rate
b. compound rate of interest
c. stated rate of interest
d. effective annual rate

2. An agreement whereby an investment banker tries to sell securities of an issuing corporation, but assumes no risk if the flotation is unsuccessful is called a:
a. due diligence agreement
b. best-effort agreement
c. firm commitment price agreement
d. shelf registration agreement

3. When the market interest rate is above the coupon rate for a particular quality of bond, the bond will be priced:
a. below its par value
b. at its par value
c. above its par value
d. The bond price cannot be determined

1. d
2. b
3. a