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    Financial Managements

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    Question 1
    A bond with a coupon rate of 7.2%, matuing in 10 years at a value of $1000 and a current market price of $800, will have a yield to maturity (using the approximation formula) of between ______% and ______%.
    a. 10; 10.5
    b. 10.5; 11
    c. 11; 11.5
    d. 11.5; 12

    Question 7
    Which of the following is the lowest in priority of claims against a bankrupt firm?
    a. A junior mortgage bond
    b. A senior debenture
    c. Common stock
    d. A subordinated debenture

    Question 8
    With regard to interest rates and bond prices, it can be said that ______.
    a. a 1% change in interest rates will cause a greater change in long-term bond prices than short-term prices
    b. a 1% change in interest rates will cause a greater change in short-term bond prices than long-term prices
    c. long-term rates are more voloatile than short-term rates
    d. a decrease in interest rates will cause bond prices to fall

    Question 11
    Discuss the significance of the GrammLeach-Blile Act to investment banking. Are there any procedures in place to protect a bank's capital? Explain. (200 words)

    Question 12
    Explain why Kirk Kerkorian is referred to as a "turnaround artist of the highest order." Describe how his actions affected the bond rating for General Motors. (200 words)

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    Solution Summary

    A bond with a coupon rate of 7.2%, matuing in 10 years at a value of $1000 and a current market price of $800, will have a yield to maturity (using the approximation formula) of between ______% and ______%.

    $2.19