现金／债券选择（cash／bond selection)

______cash flow is associated with weak bond ratings and higher default rates.

A．Frequent

B．Volatile

C．Low

D．High

A.Debit to Bond Interest Expense of ￥30,000.

B.Credit to Cash of ￥33,000.

C.Debit to Discount on Bonds Payable of ￥3,000.

D.Debit to Bond Interest Expense of ￥33,000.

Which of the following is not true of duration？______.

A．Duration is a weighted average of the maturities of the cash payments.

B．All else being equal, the longer the term to maturity of a bond, the longer its duration.

C．All else being equal, when interest rates rise, the duration of a coupon bond rises.

D．All else being equal, the higher the coupon rate on the bond, the shorter the bond's duration.

red to as a lender. Most securities traded in the secondary markets belong to one of two broad classifications: bonds or stocks. Bonds are credit instruments redeemable in a given number of dollars and yielding a fixed return. Important characteristics of bonds include face (or par) value, maturity date, and coupon rate. Face values for most bonds are 5; 1 000, although some government issues have $ 10 000 face values. Face value represents the total amount of cash payable to the owner at the bond's maturity date, which can range from 1 to 30 years. Prior to maturity, yearly coupon payments equal to the coupon rate times the face value are paid. These coupons represent a profit to the bond owner. Coupon rates on newly issued bonds closely follow the level of interest rates in the economy. Once set in the initial primary market sale, however, the coupon on a given issue will not change in response to changing interest rates in the economy. Instead, the market price of the bond changes. When a bond's coupon rate is equal to the general level of interest rates prevailing in the economy, the bond's market price will be equal to its face value. When the coupon rate is higher than prevailing interest rates, the bond will sell at a premium over its face value. When the coupon rate is lower than prevailing interest rates, the bond will sell at a discount from its face value. Interest on bonds constitutes a legal obligation, and failure to pay it may result in bankruptcy.

Preferred stocks are similar to bonds in that they have stated face values (often 100) and a specified dividend payment (similar to a bond's coupon). They differ from bonds because they do not have a scheduled maturity date and because yearly dividends may remain unpaid for a few years without forcing the issuer into bankruptcy. Common stocks have no specified yearly cash payments or maturity date. These securities have an infinite life on which cash will be earned only if the issuer has satisfactory profits. Because the cash returns on bonds are the most certain, they are viewed as the least risky investment and provide the lowest expected rate of return. Preferred stocks are viewed as more risky than bonds and less risky than common stocks. Common stocks are the most risky and provide the largest expected returns.

A secondary market is where ______.

A．the original security issuers sells their securities.

B．the original lender trade securities with other people.

C．loans are borrowed and paid with interest.

D．bond and stocks are traded by the original borrowers and leaders.

Accurately assessing______has always been the only method of lending successfully.

A．the security's realizable value

B．the borrower's creditworthiness

C．the borrower's cash flow condition

D．liquidity of the borrower's assets

可转换债券(convertible bond)

息票债券(coupon bond)

可赎回债券(callable bond)

债券(bond)