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QUESTION 1 A bond that has a price of $ 1 0 8 0 and a yield of 8 % must have a coupon rate
QUESTION A bond that has a price of $ and a yield of must have a coupon rate that is a bond that has a price of $ and a yield of A higher than B lower than C equal to points QUESTION The coupon rate on a bond is A greater than the yield to maturity when the bond sells at a discount B the same as the yield to maturity before the maturity date C equal to the markets required return on the bond when the bond is selling at par value D the bonds annual interest payment divided by the bonds price points QUESTION If you expect yields to rise, which bond should you choose? Bond Coupon Rate YTM Callable? Time to maturity A NO years B YES years A B AB points QUESTION A bond that has a yield of and a coupon rate of should have a price than a bond that has a yield of and a coupon rate of A higher B lower C equal points QUESTION Bond A has a yield to call of Bond B has a yield to call of Both bonds are currently callable. If the yield to maturity on both bonds is which bond will be called? A B AB Not enough information to determine. points QUESTION If yields decrease by which bond will have the higher capital gain? Bond Coupon Rate YTM Callable? Time to maturity A NO years B YES years A B AB points QUESTION Which of the following bonds is more likely to be called? Callable Bond Coupon Rate YTM Call Price Time to call A $ years B $ years A B AB Not enough information to determine. points QUESTION Bond A has an annual coupon of $ Bond B has a coupon rate. Both bond's yields are currently All else equal, Bond As holding period return will be the Bond Bs holding period return over the next year. A higher than B lower than C equal to points QUESTION A bond that pays a $ coupon annually and has a yield of must have a price that is a bond that has a yield of and pays a $ coupon twice a year A higher than B lower than C equal to points QUESTION A year zerocoupon bond must have a price that is a year zerocoupon bond. A higher than B lower than C equal to points QUESTION All else equal, when yield to maturity decreases, bond value decreases. True False points QUESTION If yields remain constant, which of the following bonds will have a capital gain over the year? Bond Coupon Rate YTM Time to maturity A years B years A B AB points
QUESTION
A bond that has a price of $ and a yield of must have a coupon rate that is a bond that has a price of $ and a yield of
A
higher than
B
lower than
C
equal to
points
QUESTION
The coupon rate on a bond is
A
greater than the yield to maturity when the bond sells at a discount
B
the same as the yield to maturity before the maturity date
C
equal to the markets required return on the bond when the bond is selling at par value
D
the bonds annual interest payment divided by the bonds price
points
QUESTION
If you expect yields to rise, which bond should you choose?
Bond
Coupon Rate
YTM
Callable?
Time to maturity
A
NO
years
B
YES
years
A
B
AB
points
QUESTION
A bond that has a yield of and a coupon rate of should have a price than a bond that has a yield of and a coupon rate of
A
higher
B
lower
C
equal
points
QUESTION
Bond A has a yield to call of Bond B has a yield to call of Both bonds are currently callable. If the yield to maturity on both bonds is which bond will be called?
A
B
AB
Not enough information to determine.
points
QUESTION
If yields decrease by which bond will have the higher capital gain?
Bond
Coupon Rate
YTM
Callable?
Time to maturity
A
NO
years
B
YES
years
A
B
AB
points
QUESTION
Which of the following bonds is more likely to be called?
Callable Bond
Coupon Rate
YTM
Call Price
Time to call
A
$
years
B
$
years
A
B
AB
Not enough information to determine.
points
QUESTION
Bond A has an annual coupon of $ Bond B has a coupon rate. Both bond's yields are currently All else equal, Bond As holding period return will be the Bond Bs holding period return over the next year.
A
higher than
B
lower than
C
equal to
points
QUESTION
A bond that pays a $ coupon annually and has a yield of must have a price that is a bond that has a yield of and pays a $ coupon twice a year
A
higher than
B
lower than
C
equal to
points
QUESTION
A year zerocoupon bond must have a price that is a year zerocoupon bond.
A
higher than
B
lower than
C
equal to
points
QUESTION
All else equal, when yield to maturity decreases, bond value decreases.
True
False
points
QUESTION
If yields remain constant, which of the following bonds will have a capital gain over the year?
Bond
Coupon Rate
YTM
Time to maturity
A
years
B
years
A
B
AB
points
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