FM - Topic 5

 If a company wishes to finance a printing press with a five-year life, it would be advisable to finance it with a/an:

• Overdraft
• Bank bill
• Commercial paper
• Fully drawn advance

"Yield"

• Money received after making an investment
• Percentage of an original investment that an investor collects
• The rate of return on a bond
• The interest rate a bond seller pays a bond buyer

"Coupon Rate"

• Money received after making an investment
• Percentage of an original investment that an investor collects
• The rate of return on a bond
• The interest rate a bond seller pays a bond buyer

Corporate bonds are issued by...

• Private Companies
• Local Governments
• The Federal Government
• Banks

Municipal bonds are issued by...

• Private Companies
• Local Governments
• The Federal Government
• Banks

High-risk bonds issued by new companies are often called...

• Junk Bonds
• Savings Bonds
• Municipal Bonds
• James Bonds

Bonds with coupon rates that are linked to inflation rates are called...

• Inflation-Indexed Bonds
• Junk Bonds
• Futures
• Stock Bonds

Which tends to be riskier, stocks or bonds?

• Stocks
• Bonds
• Neither are risky
• Both are equally risky

Buying a bond from a company means that you become a __________ for that business.

• Owner
• Lender
• Customer
• Stockbroker

If a company wished to structure its financing so it repaid funds borrowed only when a project had positive cash flows, it would choose a/an:

• Fully drawn advance
• Term loan
• Interest Only Loan
• Deferred Payment loan