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1. Which of the following statements regarding fixed-income securities is correct?
A. All fixed-income securities are free from default risk.
B. The current yield on a fixed-income security always equals its coupon rate.
C. Fixed-income securities include money market instruments.
D. Fixed-income securities tend to rise in price when interest rates rise.
2. You bought a stock nine months ago at $23 a share. Today, you sold that stock for $28.50 a share. The stock paid no dividends. What was your annualized rate of return?
A. 35.41%
B. 32.94%
C. 31.80%
D. 28.23%
3. Nine months ago, you bought 500 shares of a mutual fund at an offering price of $28 per share. The fund charges a front-end load of 3.5 percent and has total annual expenses of 1.24 percent. The fund’s NAV today is $26.89. There were no fund distributions during these nine months. What’s your holding period return on this investment?
A. -2%
B. 4%
C. 3.2%
D. -4%
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