1 matks A) The bund rating is it b) Market value is less than face value p+T1=3ctfy=1006 C) The compon rate is 3 petcont D) The bood has a "make whole" call price E) The interest payments are variable 1. Debt provides ownership interest in the firm ii) Payment of interest on debt is tax deducible ii. Un-paid debt is a liability of the firm 20) From the given starements above, which is (are) true? 3 marks A) 1 caly B) i and is C) i and iii D) ii and iii E) i, ii, and iii 21) Which bond would you generally expect to have the highest yield? 3 marks A) Risk-free Treasury bond B) Non-taxable, highly liquid bond C) Long-term, high-quality, tax-free bond D) Short-term, inflation-adjusted bond E) Long-term, taxable junk bond 22) If the risk-free rate in 2.2 percent, the inflation rate is 1.9 pereent, and the market rate of 3 marks A) 0% 8) 0.5% c) 1.7% D) 2.8% E) 4,3%s 23) Lampoon bonds are 5 ycar bonds with a face value of 51,000 and are currenty quoted at 867.25 . The bonds have coupon rate of 6.5 percent, paid annually. What is the current yield on these bonds? 4 marks (A) 6,50% B) 7.05% 1/Y= c) 7.49% PV=86.725 D) 8.67% Fv=1000 E) 10.00% PMT=6s 24) Rao Investments has 6.5 percent coupon bonds outstanding with a current market price of $548. The yield to maturity is 13.2 percent and the face value is $1,000. Interest is paid annually. How many years is it until these bonds mature? 5 marks A) 14.19 years B) 16.16 years c) 1741 years D) 17.84 years 1/Y=13.2FV=1000PMT=65PV=548 E) 1832 years 1 matks A) The bund rating is it b) Market value is less than face value p+T1=3ctfy=1006 C) The compon rate is 3 petcont D) The bood has a "make whole" call price E) The interest payments are variable 1. Debt provides ownership interest in the firm ii) Payment of interest on debt is tax deducible ii. Un-paid debt is a liability of the firm 20) From the given starements above, which is (are) true? 3 marks A) 1 caly B) i and is C) i and iii D) ii and iii E) i, ii, and iii 21) Which bond would you generally expect to have the highest yield? 3 marks A) Risk-free Treasury bond B) Non-taxable, highly liquid bond C) Long-term, high-quality, tax-free bond D) Short-term, inflation-adjusted bond E) Long-term, taxable junk bond 22) If the risk-free rate in 2.2 percent, the inflation rate is 1.9 pereent, and the market rate of 3 marks A) 0% 8) 0.5% c) 1.7% D) 2.8% E) 4,3%s 23) Lampoon bonds are 5 ycar bonds with a face value of 51,000 and are currenty quoted at 867.25 . The bonds have coupon rate of 6.5 percent, paid annually. What is the current yield on these bonds? 4 marks (A) 6,50% B) 7.05% 1/Y= c) 7.49% PV=86.725 D) 8.67% Fv=1000 E) 10.00% PMT=6s 24) Rao Investments has 6.5 percent coupon bonds outstanding with a current market price of $548. The yield to maturity is 13.2 percent and the face value is $1,000. Interest is paid annually. How many years is it until these bonds mature? 5 marks A) 14.19 years B) 16.16 years c) 1741 years D) 17.84 years 1/Y=13.2FV=1000PMT=65PV=548 E) 1832 years
