Again, using the bond date from problem 5 above, what would be the capital gain or loss yield. 0.39% 3.90% 0.75% -3.90% If the bond described in question 5 was selling for $1076.14, what would the current yield be? 6.04% 5.05% 5.50% 4.75% Corporate Commercial paper is: a) b) An unsecured obligation of the corporation Generally sold with a maturity of 270 days or less Sold on a discounted basis All of the above d) 10) One main difference between a futures contract and an option contract is: a) b) c) d) A futures contract confers a right, but not an obligation A futures contract creates a contractural obligation Futures contracts are only used for speculative purposes An option contract creates a contractural obligation to buy or sell a security 11) Using a futures contract as a "hedge" means that: a) b) c) d) You believe the price of the underlying asset will increase You are seeking to control your costs, rather than make money You have a use for the item you have contracted for and likely intend to take delivery b) and c) 12) If you purchased 10,000 bushels of soybeans in a futures contract for $10.00 a bushel, and the price rose to $12.50 prior to maturity, what would your dollar gain or loss be? a) $2,500 $10,000 $25,000 $15,000 1) A Money Market security is one which: a) b) Matures beyond 12 months Is collateralized by US Government obligations Matures in less than one year Has a floating interest rate c) d) 2) The value of a derivative security is based on the value of the underlying primary asset TRUE FALSE Money Market Securities which are sold on a discounted basis include: a) b) c) d) Treasury Notes Treasury Bills Commercial Paper b) and c) The Yield to Maturity of a corporate bond issue is equal to: b) The "Coupon" Rate The present value of all the interest payments The current yield plus the capital gain or loss yield The yield of a comparable US government security plus inflation d) 5) You are considering purchasing a corporate bond that has a 10 year maturity, a $1,000 par value, and a 6.5% coupon rate. If an appropriate YTM for bonds of this type is 7.25%, and the price today is $947.30, what would your next payment be if you owned 10 bonds? $650.00 $65.00 $32.50 $325.00 6) For the bond described in problem 5 above, what would be the current yield? 7.25% 6.53% 6.86% 7.10%