Exam 14: Bond Prices and Yields

Which one of the following statements about convertibles is 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.

Accrued interest

If a 7.5% coupon bond is trading for $1,050.00, it has a current yield of

Altman's Z scores are assigned based on a firm's financial characteristics and are used to predict

CDOs are divided in tranches

A coupon bond that pays interest of $90 annually has a par value of $1,000, matures in nine years, and is selling today at a $66 discount from par value.The yield to maturity on this bond is

Which of the following is not a type of international bond

The bonds of Ford Motor Company have received a rating of "B" by Moody's.The "B" rating indicates

If a 7% coupon bond that pays interest every 182 days paid interest 32 days ago, the accrued interest would be

A coupon bond that pays interest semi-annually has a par value of $1,000, matures in seven years, and has a yield to maturity of 11%.The intrinsic value of the bond today will be __________ if the coupon rate is 8.8%.

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

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

Three years ago you purchased a bond for $974.69.The bond had three years to maturity, a coupon rate of 8%, paid annually, and a face value of $1,000.Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below.Today is the bond's maturity date.What is your realized compound yield on the bond

You purchased an annual interest coupon bond one year ago with six 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

One year ago, you purchased a newly issued TIPS bond that has a 4% coupon rate, five years to maturity, and a par value of $1,000.The average inflation rate over the year was 3.6%.What is the amount of the coupon payment you will receive, and what is the current face value of the bond

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

A coupon bond that pays interest annually has a par value of $1,000, matures in seven years, and has a yield to maturity of 9.3%.The intrinsic value of the bond today will be ______ if the coupon rate is 8.5%.

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

Consider the following $1,000 par value zero-coupon bonds: The yield to maturity on bond C is