Questions from Financial Management


Q: If bonds pay fixed interest rates, how can they be sold

If bonds pay fixed interest rates, how can they be sold year after year on the secondary market? Include the idea of how yields adjust to changing market interest rates.

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Q: Why do bonds have indentures?

Why do bonds have indentures?

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Q: Describe bond pricing as two time-value-of-money

Describe bond pricing as two time-value-of-money problems.

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Q: What is a trade deficit, and why does it hurt us

What is a trade deficit, and why does it hurt us to consistently run a deficit with another country?

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Q: Discuss the nature of stock as an investment. Do most stockholders

Discuss the nature of stock as an investment. Do most stockholders play large roles in the management of the firms in which they invest? Why or why not?

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Q: What is the relationship between bond prices and interest rates? Verbally

What is the relationship between bond prices and interest rates? Verbally describe how this relationship comes about. How can we use this relationship to estimate the value of a bond?

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Q: Preferred stock is said to be a hybrid of common stock and

Preferred stock is said to be a hybrid of common stock and bonds. Explain fully. Describe the cash flows associated with preferred stock and their valuation.

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Q: Discuss the relative riskiness of investment in bonds, common stock,

Discuss the relative riskiness of investment in bonds, common stock, and preferred stock.

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Q: Compare fundamental analysis and technical analysis. Which makes more sense to

Compare fundamental analysis and technical analysis. Which makes more sense to you?

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Q: What does the efficient market hypothesis say? What is its implication

What does the efficient market hypothesis say? What is its implication for stock analysis?

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