Exam 10: Bond Prices and Yields

Phil owns a 7 percent,semiannual coupon bond that has a face value of $1,000 and matures in 16 years.The bond has a current yield to maturity of 7.1 percent.What will the percentage change in the price of his bond be if interest rates decrease by 50 basis points?

Alex purchased a $1,000 par value bond one year ago at a price of $1,016.At the time of purchase,the bond had 12 years to maturity and a 5 percent,semiannual coupon.Today,the bond has a yield to maturity of 5.25 percent.What is his realized yield as of today?

How does the size of the change in a bond's price react in response to a given change in the yield to maturity as the time to maturity increases?

Which one of the following involves creating a portfolio in a manner which minimizes the uncertainty of the portfolio's maturity target date value?

Which one of the following statements is correct?

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

Alaskan Motors has outstanding bonds that mature in 13 years and pay $34.50 every 6 months in interest.The par value is $1,000 per bond and the market value is $990.The coupon rate is ________ percent,the current yield is ________ percent,and the yield to maturity is ________ percent.

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

The yield value of a 32^nd is the change needed in which one of the following to cause a bond's price to change by 1/32^nd?

Last year,BT Motors issued 10-year bonds with a 9 percent coupon and semi-annual interest payments.What is the market price of a $1,000 bond if the yield to maturity is 8.9 percent?

Which one of the following statements applies to a par value bond?

Which one of the following is the correct definition of a coupon rate?

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

A bond has a par value of $1,000,a market price of $1,030,and a coupon rate of 6.0 percent.What is the current yield?

A bond has a dollar value of an 01 of 0.0748.What is the yield value of a 32^nd?

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

You own a 6.5 percent,semiannual coupon bond that matures in 12 years.The par value is $1,000 and the current yield to maturity is 6.4 percent.What will the percentage change in the price of your bond be if the yield to maturity suddenly increases by 25 basis points?

The price of a bond decreased by 1.45 percent in response to an increase in the yield to maturity from 7.2 to 7.6 percent.What is the bond's Macaulay duration?

You want to buy a bond that has a quoted price of $923.The bond pays interest semiannually on April 1 and October 1.The coupon rate is 6 percent.What is the clean price of this bond if today's date is June 1? Assume a 360-day year.

The yield-to-maturity assumes which one of the following?