Exam 2 Flashcards by Jack Amheiser | Brainscape

Flashcards in Exam 2 Deck (16)

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1

What are Moody's investment grade bonds rated

Aaa
Aa
A
Baa

2

What are S and P's investment grade bonds

AAA
AA
A
BBB

3

When did the bond market collapse?

Early 1990s

4

Floating Rate Bonds?

Bonds interest rate is tied to something else

EX: Like the Treasury Bond rate

5

The Federal Reserve Discount rate is affected by these 3 things

MRP
DRP
LP

6

Convertible Bonds

Bond that can be converted into stock by the bondholder at an option

7

Bonds with Warrants

Bond that allows you as the bondholder to buy stock for a stated price

8

Indexed (Purchasing Power) Bonds

Bonds where the interest rate that calculates the pmt's rises as inflation also rises

9

YTM = _ + _

DY + CGY

10

When a company is liquidized, who gets paid first? Who gets paid last?

1st - Secured Creditors
2nd - Common Stockholders

11

What do non-diversified investors care about?

What do diversified investors care about?

Non-Diversified
- Co-efficient of variation
-CV

Diversified
-Beta

12

3 ways a firm can avoid a takeover

-Require 75% vote instead of 50% from stockholders to approve merger

-Elect 1/3 new board of directors

-Vote in poison pill provison

13

What is a poison pill?

Allows firm that is getting taken over to buy the takeover firm's shares at a reduced price

14

Ks

Required Return

15

Kd

Required Return of Market

16

FAANG

Facebook
Apple
Amazon
Netflix
Google