A) pays a variable coupon payment. B) has a market price in excess of face value. C) has a duration that is less than that required by an investor. D) has a par value that is less than $1,000. E) has a face value that exceeds the market value. A) pays a variable coupon payment. B) has a market price in excess of face value. C) has a duration that is less than that required by an investor. D) has a par value that is less than $1,000. E) has a face value that exceeds the market value.

Exam 10: Bond Prices and Yields

You own a bond that pays semiannual interest payments of $38. The bond is callable in 2 years at a premium of $76. What is the callable bond price if the yield to call is 7.9%?

(Multiple Choice)

4.9/5

(76)

Question 61

A bond has a face value of $1,000 and a coupon rate of 3.25%. What is your annual interest payment if you own 12 of these bonds?

(Multiple Choice)

4.8/5

(92)

Question 62

According to Malkiel's theorems, bond prices and bond yields are:

(Multiple Choice)

4.9/5

(94)

Question 63

Price risk is the risk that:

(Multiple Choice)

4.9/5

(82)

Question 64

You are buying a bond at a quoted price of $936. The bond has a 6.0% coupon and pays interest semiannually on February 1 and August 1. What is the dirty price of this bond if today is April 1? Assume a 360-day year.

(Multiple Choice)

5.0/5

(77)

Question 65

Assuming there is no default risk, both a premium bond and a discount bond must share which one of the following characteristics?

(Multiple Choice)

4.7/5

(74)

Question 66

A bond has a modified duration of 5.87 years, a par value of $1,000, and a current market value of $1,008. What is the dollar value of an 01?

(Multiple Choice)

5.0/5

(83)

Question 67

Last year, you created an immunized portfolio with an average maturity date of 14.5 years, a yield to maturity of 9.8%, and a duration of 9.6 years. According to the policy of dynamic immunization, which of the following is the best choice for modifying your portfolio?

(Multiple Choice)

4.9/5

(85)

Question 68

A discount bond:

(Multiple Choice)

4.9/5

(83)

Question 69

Dynamic immunization is primarily aimed at reducing which one of the following risks?

(Multiple Choice)

4.9/5

(89)

Question 70

Jefferson-Smith bonds are quoted at a price of $952.42 for a $1,000 face value bond. These bonds have a modified duration of 9.84. What is the dollar value of an 01?

(Multiple Choice)

4.9/5

(75)

Question 71

A $1,000 par value bond is currently valued at $1,055. The bond pays interest semiannually, has 10 years to maturity, and has a yield to maturity of 7.3%. The coupon rate is % and the current yield is %.

(Multiple Choice)

4.8/5

(88)

Question 72

Which one of the following statements is correct according to Malkiel's Theorems?

(Multiple Choice)

4.8/5

(84)

Question 73

The modified duration:

(Multiple Choice)

4.8/5

(75)

Question 74

Which one of the following increases the probability that a bond will be called?

(Multiple Choice)

4.8/5

(102)

Question 75

The dirty price of a bond is the:

(Multiple Choice)

4.9/5

(87)

Question 76

An issuer has a bond outstanding that matures in 18 years. Which one of the following prevents the issuer from buying back that bond today?

(Multiple Choice)

5.0/5

(69)

Question 77

A bond pays semiannual interest payments of $38.25. What is the coupon rate if the par value is $1,000?

(Multiple Choice)

4.8/5

(81)

Question 78

A zero coupon bond has a par value of $1,000 and matures in 6.5 years. The yield to maturity is 5.5%. What is the Macaulay duration?

(Multiple Choice)

4.7/5

(95)

Question 79

Which one of the following statements is correct concerning a callable bond that is currently selling below face value? Assume there is no risk of default. Also assume the issuer only calls bonds when they can be refinanced at a lower rate of interest.

(Multiple Choice)

4.8/5

(75)

Question 80

Showing 61 - 80 of 104

Exam 10: Bond Prices and Yields

You own a bond that pays semiannual interest payments of $38. The bond is callable in 2 years at a premium of $76. What is the callable bond price if the yield to call is 7.9%?

A bond has a face value of $1,000 and a coupon rate of 3.25%. What is your annual interest payment if you own 12 of these bonds?

According to Malkiel's theorems, bond prices and bond yields are:

Price risk is the risk that:

You are buying a bond at a quoted price of $936. The bond has a 6.0% coupon and pays interest semiannually on February 1 and August 1. What is the dirty price of this bond if today is April 1? Assume a 360-day year.

Assuming there is no default risk, both a premium bond and a discount bond must share which one of the following characteristics?

A bond has a modified duration of 5.87 years, a par value of $1,000, and a current market value of $1,008. What is the dollar value of an 01?

Last year, you created an immunized portfolio with an average maturity date of 14.5 years, a yield to maturity of 9.8%, and a duration of 9.6 years. According to the policy of dynamic immunization, which of the following is the best choice for modifying your portfolio?

A discount bond:

Dynamic immunization is primarily aimed at reducing which one of the following risks?

Jefferson-Smith bonds are quoted at a price of $952.42 for a $1,000 face value bond. These bonds have a modified duration of 9.84. What is the dollar value of an 01?

A $1,000 par value bond is currently valued at $1,055. The bond pays interest semiannually, has 10 years to maturity, and has a yield to maturity of 7.3%. The coupon rate is ________% and the current yield is ________%.

Which one of the following statements is correct according to Malkiel's Theorems?

The modified duration:

Which one of the following increases the probability that a bond will be called?

The dirty price of a bond is the:

An issuer has a bond outstanding that matures in 18 years. Which one of the following prevents the issuer from buying back that bond today?

A bond pays semiannual interest payments of $38.25. What is the coupon rate if the par value is $1,000?

A zero coupon bond has a par value of $1,000 and matures in 6.5 years. The yield to maturity is 5.5%. What is the Macaulay duration?

Which one of the following statements is correct concerning a callable bond that is currently selling below face value? Assume there is no risk of default. Also assume the issuer only calls bonds when they can be refinanced at a lower rate of interest.

A Brief History of Risk and Return

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Overview of Security Tips

Mutual Funds and Other Investment Companies

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Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

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Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

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Projecting Cash Flow and Earnings

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A $1,000 par value bond is currently valued at $1,055. The bond pays interest semiannually, has 10 years to maturity, and has a yield to maturity of 7.3%. The coupon rate is % and the current yield is %.