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FIN 355 Quiz 3 ANSWER

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Question 1

2 out of 2 points

Correct          

Bonds issued by state and local governments to fund private projects are called

Answer

Selected Answer:      

industrial revenue bonds

Correct Answer:        

industrial revenue bonds

Question 2

2 out of 2 points

Correct          

You assess that one-year and three-year zero-coupon bonds are priced correctly but a two-year zero-coupon bond is overpriced. To take advantage of this mispricing, you should

Answer

Selected Answer:      

sell short the two-year bond and buy one-year and three-year-bonds

Correct Answer:        

sell short the two-year bond and buy one-year and three-year-bonds

Question 3

2 out of 2 points

Correct          

A bond that has no specific collateral to support it is

Answer

Selected Answer:      

a debenture

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