dition 12. Which of the following bonds is most likely to be called? A 30-year ro-coupon bond yielding 2.43% when prevailing rates are 2.56% An 8% coupon bond, selling for $915. A 15-year bond with a 6 coupon rate selling for $1.092 d A 30 year bond with an annual coupon of quoted at 8.5 13. Government National Mortgage Association bonds are not subject to which of the following interest rate risk Dewult risk Prepayment is d Government National Mortgage Association boods are subject to all of the above rise 14. Ivan is considering purchasing a 20-year bond that is selling for $1.055. Which of the following is correct if this band has a 3.75% coupon, paid semiannually a The YTM current yield h. The current yield> YTM The coupon rate current d. All of the above 15. Which of the following has the most default risk? 30 yearTreasury bond | NHA XYZ Small Cap Corporate bond - AA rated Central City Municipal General Obligation Bond- rated. 16. Fixed income investments may be subject to which of the following risks? The risk of a company being downgraded by one of the ringsagencies. b Reesentate risk Prepayment is d All of the above 17. Eric is considering the following bonds that are all AAA rated. Which of these has the least amount of interest rate riske A 10 year bond with a 4% coupon b A 10-year bond with a 3% coupon. C A 15-year bond with a 396 coupon. d A 20year bond with a 3 coupon 1EL Which of the following statements is correct about duration? Duration will always be less than the maturity for a bond. The duration of a bond increases as YTM increases. Modified duration is a precise measure of the change in the price of a bond based on a change in interest rates & The duration of a portfolio equals the sum of the weighting of each portfolio component multiplied by its duration dition 12. Which of the following bonds is most likely to be called? A 30-year ro-coupon bond yielding 2.43% when prevailing rates are 2.56% An 8% coupon bond, selling for $915. A 15-year bond with a 6 coupon rate selling for $1.092 d A 30 year bond with an annual coupon of quoted at 8.5 13. Government National Mortgage Association bonds are not subject to which of the following interest rate risk Dewult risk Prepayment is d Government National Mortgage Association boods are subject to all of the above rise 14. Ivan is considering purchasing a 20-year bond that is selling for $1.055. Which of the following is correct if this band has a 3.75% coupon, paid semiannually a The YTM current yield h. The current yield> YTM The coupon rate current d. All of the above 15. Which of the following has the most default risk? 30 yearTreasury bond | NHA XYZ Small Cap Corporate bond - AA rated Central City Municipal General Obligation Bond- rated. 16. Fixed income investments may be subject to which of the following risks? The risk of a company being downgraded by one of the ringsagencies. b Reesentate risk Prepayment is d All of the above 17. Eric is considering the following bonds that are all AAA rated. Which of these has the least amount of interest rate riske A 10 year bond with a 4% coupon b A 10-year bond with a 3% coupon. C A 15-year bond with a 396 coupon. d A 20year bond with a 3 coupon 1EL Which of the following statements is correct about duration? Duration will always be less than the maturity for a bond. The duration of a bond increases as YTM increases. Modified duration is a precise measure of the change in the price of a bond based on a change in interest rates & The duration of a portfolio equals the sum of the weighting of each portfolio component multiplied by its duration
