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1. What is the value of a 15-year 10% $1,000 coupon bond when the market interest rate is 15%? $421 $708 $1,000 $1,519 _________ 2.
1. What is the value of a 15-year 10% $1,000 coupon bond when the market interest rate is 15%?
- $421
- $708
- $1,000
- $1,519
_________
2. What is the value of a 12-year 10% $1,000 bond when the market interest rate is 5%?
- $1,000
- $1,050
- $1,443
- $2,200
________
3. What is the value of a 10-year 10% $1,000 bond when the market interest rate is 10%?
- $900
- $975
- $1,000
- $1,050
_______
4. For a 10% $1,000 coupon bond, when the market interest rate is greater than 10%, the value of the bond:
- Is unaffected and still equals its par value of $1,000.
- Is less than its par value of $1,000.
- Is greater than its par value of $1,000.
- Cannot determine because it depends on the term of the bond in years.
-_________
5. For a 10%, $1,000 coupon bond, a longer term bond (say, 15 years) is:
- less affected by changes in the market rate than a 1-year bond.
- affected the same by changes in the market rate than a 1-year bond.
- more affected by changes in the market rate than a 1-year bond.
- Cannot be determined.
__________
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