WGU C214 ESP Concepts Quiz 31-65

31.  What finance principle impacts a person's mortgage loan rate?

• a.  Profit maximization

• b.  Time value of money

• c.   Risk aversion

• d.   Market Efficiency

32. What factor does not impact financial market pricing?

• a. Time value of money

• b. Risk aversion

• c. Financial statements

• d. Uncertainty

34. The minimum yield necessary to induce investors to buy is thev

• a. Interest rate

• b. Coupon rate

• c. Required return

• d. APY

35.  How are bonds different from stock?

• a.  Cash payments to investors are legal obligation

• b.  Bond investors are part owners of the corporation

• c.  Redemption of the security is mandatory

• d.  Both a and c

36. If a bond has a premium price, its yield is

• a.  Equal to the coupon rate

• b.  Higher than the coupon rate

• c.   Lower than the coupon rate

• d.  Independent of the price

37.  What is a secured bond?

• a.  Bond used to finance assets

• b.  Bond collateralized by assets

• c.  Subordinated debenture

• d.  Debenture

38.  Risk aversion means that an investor

• a.  Requires zero risk

• b.  Must be compensated for risk

• c.  Will not buy high Beta stocks

• d.  Is prudent

39.  What is the "market risk premium"?

• a.  Average yield on bonds  

• b.  Expected yield on stocks

• c.  Expected yield on stocks versus Treasury rates.

• d.  Same as Beta

40.  What factor determines the "market risk premium" on stocks?

• a.  Earnings growth rate

• b. Perceived riskiness

• c.  Seasonality

• d.  Earnings per share

41.  What is the goal of the Securities and Exchange Commission (SEC)?

• a.  Maximize stock prices

• b.  Regulate interest rates

• c.  Minimize "too big to fail" concerns

• d.  Promote security market efficiency