Exam 14: Bond Prices and Yields

A convertible bond has a par value of $1,000 and a current market price of $850. The current price of the issuing firm's stock is $29, and the conversion ratio is 30 shares. The bond's market conversion value is

A coupon bond that pays interest semi-annually has a par value of $1,000, matures in five years, and has a yield to maturity of 10%. The intrinsic value of the bond today will be __________ if the coupon rate is 8%.

The bond market

If a 7.25% coupon bond is trading for $982.00, it has a current yield of

You have just purchased a 12-year zero-coupon bond with a yield to maturity of 9% and a par value of $1,000. What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 10% at the time you sell.

A Treasury bill with a par value of $100,000 due one month from now is selling today for $99,010. The effective annual yield is

The bond indenture includes

Accrued interest

A coupon bond that pays interest semi-annually is selling at a par value of $1,000, matures in seven years, and has a coupon rate of 8.6%. The yield to maturity on this bond is

A coupon bond pays annual interest, has a par value of $1,000, matures in 12 years, has a coupon rate of 8.7%, and has a yield to maturity of 7.9%. The current yield on this bond is

Which of the following is NOT a mortgage pass-through agency?

A Treasury bond due in two year has a yield of 2.5%; a Treasury bond due in five years has a yield of 3.9%. A bond issued by Amazon due in five years has a yield of 7.6%; a bond issued by Google due in two year has a yield of 6.4%. The default risk premiums on the bonds issued by Amazon and Google, respectively, are

You purchased an annual interest coupon bond one year ago that now has 18 years remaining until maturity. The coupon rate of interest was 11%, and par value was $1,000. At the time you purchased the bond, the yield to maturity was 10%. The amount you paid for this bond one year ago was

At issue, coupon bonds typically sell

A coupon bond pays annual interest, has a par value of $1,000, matures in four years, has a coupon rate of 8.25%, and has a yield to maturity of 8.64%. The current yield on this bond is

Which one of the following statements about convertibles are false?I) The longer the call protection on a convertible, the less the security is worth.II) The more volatile the underlying stock, the greater the value of the conversion feature.III) The smaller the spread between the dividend yield on the stock and the yield-to-maturity on the bond, the more the convertible is worth.IV) The collateral that is used to secure a convertible bond is one reason convertibles are more attractive than the underlying stock.

A semi-annual coupon bond is reported as having an ask price of 108% of the $1,000 par value in the Wall Street Journal. If the last interest payment was made 30 days ago and the coupon rate is 9%, the invoice price of the bond will be

A zero-coupon bond has a yield to maturity of 11% and a par value of $1,000. If the bond matures in 27 years, the bond should sell for a price of _______ today.

The bonds of Amazon have received a rating of "B" by Moody's. The "B" rating indicates

The ________ is used to calculate the present value of a bond.