I have 14 MCQ Questions that needs to be done.Please answer these questions only if you have rating of 3 and above.This is very important exam so please ensure that all answers are correct.I am attaching the questions below.

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Time to complete: 3 Hours

Question 1.1. Kop Corporation's 5-year bonds yield 6.50%, and T-bonds with the same maturity yield 4.70%. The default risk premium for Kop's bonds is DRP = 0.40%, the liquidity premium on Kop's bonds is LP = 1.40% versus zero on T-bonds, the inflation premium (IP) is 1.50%, and the maturity risk premium (MRP) on 5-year bonds is 0.40%. What is the real risk-free rate, r*? (Points : 0.07) 2.35% 3.16% 2.72% 2.91% 2.80% Question 2.2. Which of the following statements is CORRECT? (Points : 0.07) If the maturity risk premium (MRP) is greater than zero, the Treasury bond yield curve must be upward sloping. If the maturity risk premium (MRP) equals zero, the Treasury bond yield curve must be flat. If inflation is expected to increase in the future and the maturity risk premium (MRP) is greater than zero, the Treasury bond yield curve must be upward sloping. If the expectations theory holds, the Treasury bond yield curve will never be downward sloping. Because long-term bonds are riskier than short-term bonds, yields on long-term Treasury bonds will always be higher than yields on short-term T-bonds. Question 3.3. The real risk-free rate is 3.05%, inflation is expected to be 2.60% this year, and the maturity risk premium is zero. Ignoring any cross-product terms, what is the equilibrium rate of return on a 1-year Treasury bond? (Points : 0.07) 7.06% 5.65% 5.25% 5.37% 6.44% Question 4.4. Kebt Corporation's Class Semi bonds have a 12-year maturity and an 9.75% coupon paid semiannually (4.875% each 6 months), and those bonds sell at their $1,000 par value. The firm's Class Ann bonds have the same risk, maturity, nominal interest rate, and par value, but these bonds pay interest annually. Neither bond is callable. At what price should the annual payment bond sell? (Points : 0.07) $993.64 $983.80 $1,042.82 $747.69 $1,003.47 Question 5.5. Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 7.7% on these bonds. What is the bond's price? (Points : 0.07) $930.25 $883.74 $939.55 $855.83 $762.80 Question 6.6. Radoski Corporation's bonds make an annual coupon payment of 7.35% every year. The bonds have a par value of $1,000, a current price of $970, and mature in 12 years. What is the yield to maturity on these bonds? (Points : 0.07) 7.82% 7.51% 5.88% 9.45% 7.74% Question 7.7. Sadik Inc.'s bonds currently sell for $1,270 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)? (Points : 0.07) 6.89% 5.89% 5.18% 6.54% 6.30% Question 8.8. Malko Enterprises' bonds currently sell for $990. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield? (Points : 0.07) 7.35% 6.44% 9.47% 8.11% 7.58% Question 9.9. Which of the following statements is CORRECT? (Points : 0.07) Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current market interest rate is below the coupon rate than if it is above the coupon rate. A callable 10-year, 10% bond should sell at a higher price than an otherwise similar noncallable bond. Corporate treasurers dislike issuing callable bonds because these bonds may require the company to raise additional funds earlier than would be true if noncallable bonds with the same maturity were used. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current market interest rate is above the coupon rate than if it is below the coupon rate. The actual life of a callable bond will always be equal to or less than the actual life of a noncallable bond with the same maturity. Therefore, if the yield curve is upward sloping, the required rate of return will be lower on the callable bond. Question 10.10. Which of the following statements is CORRECT? (Points : 0.07) Senior debt is debt that has been more recently issued, and in bankruptcy it is paid off after junior debt because the junior debt was issued first. A company's subordinated debt has less default risk than its senior debt. Convertible bonds generally have lower coupon rates than non-convertible bonds of similar default risk because they offer the possibility of capital gains. Junk bonds typically provide a lower yield to maturity than investment-grade bonds. A debenture is a secured bond that is backed by some or all of the firm Question 11.11. Which of the following statements is CORRECT? (Points : 0.07) The total return on a bond during a given year is based only on the coupon interest payments received. All else equal, a bond that has a coupon rate of 10% will sell at a discount if the required return for bonds of similar risk is 8%. The price of a discount bond will increase over time, assuming that the bond's yield to maturity remains constant. For a given firm, its debentures are likely to have a lower yield to maturity than its mortgage bonds. When large firms are in financial distress, they are almost always liquidated, whereas smaller firms are generally reorganized. Question 12.12. As a general rule, a company's debentures have higher required interest rates than its mortgage bonds because mortgage bonds are backed by specific assets while debentures are unsecured. (Points : 0.07) True False Question 13.13. Junk bonds are high-risk, high-yield debt instruments. They are often used to finance leveraged buyouts and mergers, and to provide financing to companies of questionable financial strength. (Points : 0.08) True False Question 14.14. There is an inverse relationship between bonds' quality ratings and their required rates of return. Thus, the required return is lowest for AAA-rated bonds, and required returns increase as the ratings get lower. (Points : 0.08) True False