Exam 6: Valuing Bonds

The yield curve depicts the current relationship between:

If you purchase a three-year, 9 percent coupon bond for $950, how much could it be sold for two years later if interest rates have remained stable?

How can one find the market price of a bond given its yield to maturity and find a bond's yield given its price? Why do prices and yields vary inversely?

If the coupon rate is lower than current interest rates, then the yield to maturity will be:

Investors who own bonds having lower credit ratings should expect:

What is the current yield of a bond with a 6 percent coupon, four years until maturity, and a price of $750?

What happens to the price of a three-year bond with an 8% coupon when interest rates change from 8% to 6%?

What is the total return to an investor who buys a bond for $1,100 when the bond has a 9% coupon rate and five years remaining until maturity, then sells the bond after one year for $1,085?

Speculative-grade bonds have default risk; investment grade bonds do not.

What price was reported in the financial press for a bond that was sold to an investor for $1,045.63?

If a bond is priced at par value, then:

Why are long-term bonds more sensitive to changes in interest rates than short-term bonds?

What is the coupon rate for a bond with three years until maturity, a price of $1,053.46, and a yield to maturity of 6%?

What is the current yield of a bond with a 6% coupon, four years until maturity, and a price of $750?

If the Globe and Mail showed that the price of a $1,000 par-value bond increased by +6 from the previous day, what happened to yield to maturity?

The discount rate that makes the present value of a bond's payments equal to its price is termed the:

Which of the following bonds would be considered to be of speculative-grade?

What causes bonds to sell for a premium compared to face value?

Why are long-term bonds more sensitive to changes in interest rates than short-term bonds?

The coupon rate of a bond equals: