Questions from Financial Management

Q: What factors determine investors’ required rates of return on corporate bonds?

What factors determine investors’ required rates of return on corporate bonds? common stocks? U.S. government bonds?

Q: Why do yield curves sometimes have a downward slope and at other

Why do yield curves sometimes have a downward slope and at other times have an upward slope?

Q: If the returns from a security were known with certainty, what

If the returns from a security were known with certainty, what shape would the probability distribution of returns graph have?

Q: What is the primary difference between 20-year bonds issued by

What is the primary difference between 20-year bonds issued by the U.S. government and 20-year bonds issued by IBM?

Q: Is it possible for investors ever to require a lower rate of

Is it possible for investors ever to require a lower rate of return on a company’s equity than on its debt, assuming that the debt is in a junk-bond category of quality?

Q: You have estimated the following probability distributions of expected future returns for

You have estimated the following probability distributions of expected future returns for Stocks X and Y: a. What is the expected rate of return for Stock X? For Stock Y? b. What is the standard de...

Q: The return expected from Project No. 542 is 22 percent.

The return expected from Project No. 542 is 22 percent. The standard deviation of these returns is 11 percent. If returns from the project are normally distributed, what is the chance that the project...

Q: The expected rate of return for the stock of Cornhusker Enterprises is

The expected rate of return for the stock of Cornhusker Enterprises is 20 percent, with a standard deviation of 15 percent. The expected rate of return for the stock of Mustang Associates is 10 percen...

Q: An investor currently has all of his wealth in Treasury bills.

An investor currently has all of his wealth in Treasury bills. He is considering investing one-third of his funds in General Electric, whose beta is 1.30, with the remainder left in Treasury bills. Th...

Q: You are considering investing in two securities, X and Y.

You are considering investing in two securities, X and Y. The following data are available for the two securities: a. If you invest 40 percent of your funds in Security X and 60 percent in Security...