Question 21 of 71

Youre comparing 4 strategies for a 365-day investment. Which one offers the highest holding period yield (the yield over the entire period)?

365-day CD with a MMY of 9.86%

182.5 day CD at 9.63% MMY, then reinvested at same MMY for remaining 182.5 days

91.25 day CD at 9.57% MMY, reinvested in 91.25 day CDs at same MMY until 365 days.

30.42 month CD at 9.44% MMY, reinvested in 1 month CDs at same MMY until end of 12 months

All 4 straggles generate an identical holding period yield

Question 22 of 71

What is the discount on a 360-day T-bill priced at 90?

10.00%

10.96%

11.11%

11.13%

11.28%

Question 23 of 71

You buy a newly issued 182-day $1m US T bill at 3.00% discount. 30 days later you sell the T-bill at a 2.50% discount. What is your holding period (30 day) yield?

0.468%

0.46%

0.52%

1.328%

A loss of 1.061%

Question 24 of 71

A bond has a coupon rate of 8.5% and matures in 15 years. The next semiannual interest payment will be paid in two months. Which one of the following will definitely happen with this bond?

The bond will sell at a discount.

The bond will sell at a premium.

The dirty price will be higher than the clean price.

The clean price will be higher than the dirty price.

The market price will be greater than the par value.

Question 25 of 71

Today, August 20, you are buying a bond from a dealer with a quoted price of 104.597. The bond pays interest on March 1 and September 1. The invoice price you pay for this purchase will equal ...

the clean price.

the dirty price.

Question 26 of 71

A 4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%. You buy the bond a little over a month before you get the first coupon. Specifically, the fraction of the 6-month period that has already elapsed is 0.80. Calculate the dirty price of this bond.

81.370

85.216

93.471

95.696

Question 27 of 71

What is the clean price of the following bond?

Settlement date:	4/1/2016
Maturity date:	9/14/2019
Last coupon pre settlement	3/14/2016
First coupon post settlement	9/14/2016
Day count convention	30/360
Coupon rate (annual rate)	5.00%
Coupon payment frequency	Semi-annual
BEY (quoted yield)	2.00%

108.562

109.026

109.955

109.960

110.196

Question 28 of 71

What is the bond equivalent yield of the following bond?

Settlement	7/1/2016
Maturity	12/15/2022
Last coupon pre settlement	6/15/2016
First coupon post settlement	12/15/2016
Clean price	85.000
Par	100.000
Coupon rate (annual rate)	6.00%
Coupon frequency	Semi-annual
Day count convention	Actual/actual

9.333%

9.167%

9.125%

9.124%

5.820%

Question 29 of 71

For the IBM bond quote below, assuming a settlement date of 8/25/14, what is the dirty price of this bond? Use the bid price when calculating dirty price.

113.055

113.357

115.595

115.604

116.054

Question 30 of 71

What is the realized compound yield (RCY) of a 5-year 6% annual coupon bond priced at 85 assuming reinvestment rate of 5%.

6.52%

6.62%

9.39%

9.50%

11.33%

Question 31 of 71

Using the data in Question 30, calculate the holding period yield assuming you sold the bond at year 2 (right after receiving your second coupon) at a price of 90.

3.98%

9.39%

9.54%

9.71%

20.35%