1. A 3-year $1000 face value bond pays an annual coupon of 7% and has a ytm of 3.5%. What is this bond's price? What is this bond's duration?
2. Longer the maturity, higher is the cost of a bond. Is It TRUE OR FALSE
3. Which of the following factors is most likely to explain why a company decides to increase its annual dividend?
a. Management believe that the increase can be sustained.
b. The Pecking order theory.
c. The firm has just paid a scrip dividend.
d. A firm belief by management that dividends represent a residual payment.
e. The firm has a large number of desirable projects.