2. A U.S. Treasury bond will sell at a premium to par when _________. A. its coupon rate is greater than its yield to

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2. A U.S. Treasury bond will sell at a premium to par when
_________.
A. its coupon rate is greater than its yield to maturity
B. its coupon rate is less than its yield to maturity
C. its coupon rate equal to its yield to maturity
D. its coupon rate is less than its conversion value
E. its coupon rate is greater than its par value
3. Everything equal, which variable is inversely related to
intrinsic value of a company? Assume constant dividend growth
model.
A. D1
B. D0
C. g
D. R
E. None of the above
7. You are considering whether to invest in the
strategically important project with forecasted cash flows listed
below. Assume that the discount rate is 15% per annum. Choose one
of five possibilities listed as the correct decision-making
approach to this specific problem:
Year 1:-$1,000,000 Year 2: $2,300,000
Year 3: -1,320,000
A. Use NPV rule to make your decision; The IRR rule should not
be used.
B. Use NPV rule to make your decision; The IRR rule can be
used equally well.
C. Use IRR rule to make your decision; The NPV rule will not
be helpful.
D. Neither IRR, nor NPV rules are good decision criteria for
this problem
E. Only Payback Period Rule can be used to make your
decision.