IncorrectQuestion 1

0 / 1 pts

A 3% Australian government bond maturing on the 18th June 2022 has coupons payable semi-annually. What is the value of the bond today given a yield of 4%? It is currently 26th February 2020.

98.4

99.4

101.4

100.4

Question 2

0 / 1 pts

Which of the following statements in relation to price volatility and coupon rate is correct?

The lower the coupon rate, the greater the price volatility

This relationship is determined by the type of issuer

The lower the coupon rate, the lower the price volatility

There is no relationship between coupon rate and price volatility

Calculate the modified convexity p.a. for a 4.5% 2.5 years bond with a yield of 2% (semi-annual payments).

6.94

5.29

6.29

6.79

Question 19

0 / 1 pts

A U.S. Treasury bond will pay a lump sum of $1,000 exactly 3 years from today. The nominal interest rate is 6%, semi-annual compounding. Which of the following statements is correct?

The PV of the $1,000 lump sum has a smaller present value than the PV of a 3-year, $333.33 ordinary annuity.

The periodic interest rate is greater than 3%.

The present value of the $1,000 would be larger if interest were compounded monthly rather than semi-annually.

The present value would be greater if the lump sum were discounted back for more periods.

Calculate the modified convexity p.a. for a 4.5% 2.5 years bond with a yield of 2% (semi-annual payments).

6.94

5.29

6.29

6.79