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CFI FMVA 9 Exam Quizzes with Correct Answers
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CFI FMVA 9 Exam Quizzes with Correct Answers
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CFI FMVA 9 Exam Quizzes with CorrectAnswers
7% semiannual coupon bonds are callable in 2 years at $1054 what is the amount of the
call premium on $1000 par value
a) $52
b) $54
c) $72
d) $84
e) $89 - ✔✔b) $54
1054 - 1000 = 54
You own a bond with 6% annual coupon and it matures in 5 years. It is a 10 year bond
that was issued at par value. Which of the following applies if the market interest rate in
5.8%
a) current yield to maturity in greater than 6%
b) current yield is 6%
c) the next interest payment is $30
d) the bond is currently valued at half of its issued price
e) you will realize a capital gain if the bond is sold today - ✔✔e) you will realize a
capital gain if the bond is sold today
,A computer company has 5.25% coupon bond outstanding with a current market price
of $546.19, the yield to maturity is 16.28 and the future value is $1000. If interest is paid
semiannually, how many years until the bonds mature
a) 6.64
b) 7.08
c) 12.41
d) 14.16
e) 28.32 - ✔✔b) 7.08
PMT = (.0525/2)(1000) = 26.1
FV = 1000
PV = -546.19
I/Y = 16.28/2 = 8.14
CPT N = 14.15
14.15/2 = 7.079
The dividend growth model
I. assumes dividends increase at a constant rate
II. can be used to compute stock price at any point in time
III. can be used to value zero growth stocks
IV. requires growth rate to be less than required return
,a) I and II only
b) II and III only
c) I, III, and IV only
d) II, III and IV only
e) I, II, III, and IV - ✔✔e) I, II, III, and IV
Current dividend yield on claytons metals common stock is 2.5% the company paid
$1.48 annual dividend and announced plans to pay $1.54 next year. The dividend
growth rate is expected to stay constant what is the required rate of return
a) 6.55
b) 6.82
c) 7.08
d) 7.39
e) 7.75 - ✔✔a)6.55
1..48 = 1.0405
Growth rate = .0405
.025 + .0405 = .0655
Company paid annual dividend of $2.8 and is expected to increase by 4% per year. If you
plan to buy 1000 shares how much should you expect to pay per share if market rate of
return is 11.5%
a) $37.33
b) $38.16
c) $38.83
d) $40.38
e) $42.00 - ✔✔d)$ 40.38
, P1 = 2.80(1.04^2)/(.115-.04)
Which of the following applies to specialists on the NYSE
I. Provide liquidity for individual securities
II. partially being replaced by SuperDOT
III. Pays annual fee for trading license
IV. acts as a dealer
a) I only
b) II only
c) I and III only
d) I, II and IV only
e) I, III and IV only - ✔✔e) I, III, and IV only
Combined communications is a new firm in a growing industry, the company plans to
increase dividends by 15% for the next 4 years then decrease to 3.5% the company just
paid $0.20 dividend. What current value of share is required if required rate of return is
15.5%
a) $1.82
b) $2.04
c) $2.49
d) $2.71
e) $3.05 - ✔✔c) $2.49
Pt = (.2)(1.15)^4(1.035)/(.155-.035) = 3.017
Po = [(.2)(1.15)/.(155-.15)] + [1-(1.15/1.155)^4] +[3.017/(1.155^4)]
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