Annuities
This type of annuity has cash flows at the end of the period
What is an ordinary annuity
The common name for interest payments on a bond
What is a coupon
This type of stock does not have voting rights and has priority in respect to dividends
What is preferred stock
I want to buy a $20,000 car in 5 years. I should use this to know how much to invest today
What is present value (PV)
This type of annuity has payments at the beginning of the period
What is an annuity due
Bonds issued by the US Government are called this
What is a Treasury Bond
A way to price common stock based on the growth of a company's dividends
What is the Dividend Growth Model
I have $500 today and want to see what it will grow to in a certain amount of time. I will use this function.
What is future value (FV)
This type of annuity has constant cash flows that lasts forever
What is a perpetuity
These bonds do not have coupons and always sell at a discount
What is a zero coupon bond
Does a dealer or broker maintain an inventory of securities ready to sell
What is a dealer
A 5-year semiannual bond has this many coupon payments
What is 10
This is the actual interest rate paid over a year when compounding is taken into effect
What is EAR
When YTM goes up, this happens to a bond's price
What is decrease
This is the largest equity exchange in the world
What is the New York Stock Exchange (NYSE)
A semiannual bond has a coupon of 7.0% ($1,000 par). It's coupon payment is this
What is $35
Credit card interest rates are usually stated in this
This type of bond has a rating of BB or lower and has a high risk of default
What is a junk bond
This exchange is not a physical exchange and uses computers to link sellers to buyers
What is the NASDAQ
Bond price and YTM are ______ correlated
What is negatively correlated