Question 1

The return on bonds rises relative to other assets, in the bond market this will result in:

Accepted Answer

A)  the price of bonds falling and the yields increasing. 
B)  a rightward shift in the bond supply curve. 
C)  a shift to the left of the bond demand curve. 
D)  an increase in bond prices. 
A)  the price of bonds falling and the yields increasing. 
B)  a rightward shift in the bond supply curve. 
C)  a shift to the left of the bond demand curve. 
D)  an increase in bond prices.

Question 2

The difference in the prices of a zero-coupon bond and a coupon bond with the same face value and maturity date is simply:

Accepted Answer

A)  zero, since they are the same. 
B)  the present value of the final payment. 
C)  the present value of the coupon payments. 
D)  the future value of the coupon payments. 
A)  zero, since they are the same. 
B)  the present value of the final payment. 
C)  the present value of the coupon payments. 
D)  the future value of the coupon payments.

Question 3

Calculate the price of a zero coupon bond that has an interest rate of 6.65% (.0665), a face value of $100.00 and six-months to maturity.

Accepted Answer

We can use the formula from th

Question 4

In considering the holding period return, the longer the term of the bond the:

Accepted Answer

A)  less important is the capital gain and the more important in the current yield. 
B)  less important is the coupon rate and the more important is the current yield. 
C)  less important is the capital gain. 
D)  more important is the capital gain. 
A)  less important is the capital gain and the more important in the current yield. 
B)  less important is the coupon rate and the more important is the current yield. 
C)  less important is the capital gain. 
D)  more important is the capital gain.

Question 5

The U.S. Treasury offers several ways to purchase U.S. government bonds. There are the traditional coupon bonds and Treasury Inflation-Indexed Securities. How do these bonds differ from their traditional counterparts?

Accepted Answer

Inflation-indexed securities protect the

Question 6

The bid price for a bond quote is:

Accepted Answer

A)  the price at which the bond dealer is willing to sell the bond. 
B)  the price at which the bond dealer is willing to purchase the bond. 
C)  fixed over the life of a bond. 
D)  determined solely by the time left to maturity. 
A)  the price at which the bond dealer is willing to sell the bond. 
B)  the price at which the bond dealer is willing to purchase the bond. 
C)  fixed over the life of a bond. 
D)  determined solely by the time left to maturity.

Question 7

A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:

Accepted Answer

A)  present value is greater than its price. 
B)  current yield is equal to 8.33%. 
C)  coupon payment on this bond is equal to $75. 
D)  coupon payment on this bond is equal to $90. 
A)  present value is greater than its price. 
B)  current yield is equal to 8.33%. 
C)  coupon payment on this bond is equal to $75. 
D)  coupon payment on this bond is equal to $90.

Question 8

The bond demand curve slopes downward because:

Accepted Answer

A)  at lower prices the reward for holding the bond increases. 
B)  as bond prices fall so do yields. 
C)  as bond prices fall bonds are less attractive. 
D)  as bond prices rise yields increase. 
A)  at lower prices the reward for holding the bond increases. 
B)  as bond prices fall so do yields. 
C)  as bond prices fall bonds are less attractive. 
D)  as bond prices rise yields increase.

The return on bonds rises relative to other assets, in the bond market this will result in:

The difference in the prices of a zero-coupon bond and a coupon bond with the same face value and maturity date is simply:

Calculate the price of a zero coupon bond that has an interest rate of 6.65% (.0665), a face value of $100.00 and six-months to maturity.

In considering the holding period return, the longer the term of the bond the:

The U.S. Treasury offers several ways to purchase U.S. government bonds. There are the traditional coupon bonds and Treasury Inflation-Indexed Securities. How do these bonds differ from their traditional counterparts?

The bid price for a bond quote is:

A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:

The bond demand curve slopes downward because:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value and Interest Rates

Understanding Risk

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets and Market Efficiency

Derivatives: Futures, Options, and Swaps

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: The Federal Reserve and the European Central Bank

The Central Bank Balance Sheet and the Money Supply Process

Monetary Policy: Stabilizing the Domestic Economy

Exchange Rate Policy and the Central Bank

Money Growth, Money Demand and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

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Exam 6: Bonds, Bond Prices, and the Determination of Interest Rates

The return on bonds rises relative to other assets, in the bond market this will result in:

The difference in the prices of a zero-coupon bond and a coupon bond with the same face value and maturity date is simply:

Calculate the price of a zero coupon bond that has an interest rate of 6.65% (.0665), a face value of $100.00 and six-months to maturity.

In considering the holding period return, the longer the term of the bond the:

The U.S. Treasury offers several ways to purchase U.S. government bonds. There are the traditional coupon bonds and Treasury Inflation-Indexed Securities. How do these bonds differ from their traditional counterparts?

The bid price for a bond quote is:

A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:

The bond demand curve slopes downward because:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value and Interest Rates

Understanding Risk

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets and Market Efficiency

Derivatives: Futures, Options, and Swaps

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: The Federal Reserve and the European Central Bank

The Central Bank Balance Sheet and the Money Supply Process

Monetary Policy: Stabilizing the Domestic Economy

Exchange Rate Policy and the Central Bank

Money Growth, Money Demand and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

Filters