Exam 12: Macroeconomic and Industry Analysis

You purchased an annual interest coupon bond one year ago with 6 years remaining to maturity at the time of purchase.The coupon interest rate is 10% and par value is $1,000.At the time you purchased the bond,the yield to maturity was 8%.If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 7%,your annual total rate of return on holding the bond for that year would have been _________.

Subordination clauses in bond indentures

A 12% coupon bond,semiannual payments,is callable in 5 years.The call price is $1,120;if the bond is selling today for $1,110,what is the yield to call?

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 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 __________.

A convertible bond has a par value of $1,000 and a current market value of $850.The current price of the issuing firm's stock is $27 and the conversion ratio is 30 shares.The bond's conversion premium is _________.

You purchased an annual interest coupon bond one year ago that had 9 years remaining to maturity at that time.The coupon interest rate was 10% and the par value was $1,000.At the time you purchased the bond,the yield to maturity was 8%.If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%,your annual total rate of return on holding the bond for that year would have been _________.

RRB are

Of the following four investments,________ is considered to be the safest.

A Treasury bill with a par value of $100,000 due two months from now is selling today for $98,039,with an effective annual yield of _________.

Which one of the following statements about convertibles is true?

A coupon bond is reported as having an ask price of 113% of the $1,000 par value.If the last interest payment was made two months ago and the coupon rate is 12%,the invoice price of the bond will be ____________.

A coupon bond that pays interest annually has a par value of $1,000,matures in 5 years,and has a yield to maturity of 10%.The intrinsic value of the bond today will be ______ if the coupon rate is 7%.

A bond will sell at a discount when __________.

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

The invoice price of a bond that a buyer would pay is equal to

The bond market

One year ago,you purchased a newly issued real return bond that has a 6% coupon rate,five years to maturity,and a par value of $1,000.The average inflation rate over the year was 4.2%.What is the amount of the coupon payment you will receive and what is the current face value of the bond?

Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Price A 1 \ 909.09 B 2 \ 811.62 C 3 \ 711.78 D 4 \ 635.52 The yield to maturity on bond C is ____________.

A bond has a par value of $1,000,a time to maturity of 20 years,a coupon rate of 10% with interest paid annually,a current price of $850 and a yield to maturity of 12%.Intuitively and without the use calculations,if interest payments are reinvested at 10%,the realized compound yield on this bond must be ________.