A Payment Made by a Firm to Its Owners in the Form

question 76

Multiple Choice

A payment made by a firm to its owners in the form of new shares is called a _____ dividend.

• A)stock
• B)normal
• C)special
• D)extra
• E)liquidating

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Definitions:

Yield To Maturity

A measurement of the annual return an investor can expect from a bond if held to its end date, factoring in its price, interest payments, and time to maturity.

Zero-Coupon Bond

A bond that does not pay periodic interest payments but is sold at a deep discount from its face value and pays its full face value at maturity.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indication of interest rate risk.

Coupon Bond

A type of bond that pays the holder a fixed interest rate (the coupon) at regular intervals until the bond matures, when the principal amount is repaid.