A) pays a variable coupon payment. B) has a market price in excess of face value. C) has a duration that is less than that required by an investor. D) has a par value that is less than $1,000. E) has a face value that exceeds the market value. A) pays a variable coupon payment. B) has a market price in excess of face value. C) has a duration that is less than that required by an investor. D) has a par value that is less than $1,000. E) has a face value that exceeds the market value.

Exam 10: Bond Prices and Yields

Ted owns a bond which is callable in 2.5 years.The bond has a 6 percent coupon,pays interest semiannually,has a par value of $1,000,and has a yield to call of 6.3 percent.What is the call premium if the bond currently sells for $1,044.54?

(Multiple Choice)

4.9/5

(65)

Question 21

You own a bond that pays semiannual interest payments of $38.The bond is callable in 2 years at a premium of $76.What is the callable bond price if the yield to call is 7.9 percent?

(Multiple Choice)

4.9/5

(77)

Question 22

A bond has a current yield that is equal to the yield-to-maturity.Given this,which one of the following must also be true?

(Multiple Choice)

4.7/5

(71)

Question 23

A discount bond:

(Multiple Choice)

5.0/5

(82)

Question 24

You are buying a bond at a quoted price of $892.The bond has a 7.5 percent coupon and pays interest semiannually on February 1 and August 1.What is the dirty price of this bond if today is April 1? Assume a 360-day year.

(Multiple Choice)

4.8/5

(71)

Question 25

An issuer has a bond outstanding that matures in 18 years.Which one of the following prevents the issuer from buying back that bond today?

(Multiple Choice)

4.9/5

(68)

Question 26

The rate of return an investor actually earns from owning a bond is called which one of the following?

(Multiple Choice)

4.9/5

(81)

Question 27

A bond has a par value of $1,000 and a coupon rate of 6.5 percent.What is the dollar amount of each semiannual interest payment if you own 8 of these bonds?

(Multiple Choice)

5.0/5

(78)

Question 28

A $1,000 face value bond has a 9.0 percent coupon and pays interest semiannually.The bond matures in 2 years and has a yield to maturity of 6.5 percent.What is the Macaulay duration?

(Multiple Choice)

4.9/5

(82)

Question 29

A bond has a Macaulay duration of 4.5,a yield to maturity of 5.1 percent,a coupon rate of 6.0 percent,and semiannual interest payments.What is the bond's modified duration?

(Multiple Choice)

4.9/5

(68)

Question 30

To immunize your portfolio,you should:

(Multiple Choice)

4.8/5

(94)

Question 31

A bond has a modified duration of 5.87 years,a par value of $1,000,and a current market value of $1,008.What is the dollar value of an 01?

(Multiple Choice)

4.7/5

(78)

Question 32

Blue Water Homes has 8 percent bonds outstanding that mature in 13 years.The bonds pay interest semiannually.These bonds have a par value of $1,000 and are callable in 2 years at a premium of $75.What is the yield to call if the current price is equal to 103.25 percent of par?

(Multiple Choice)

4.8/5

(75)

Question 33

The Country Inn has bonds outstanding with a par value of $1,000 each and a 5.25 percent coupon.The bonds mature in 8.5 years and pay interest semiannually.What is the current value of each of these bonds if the yield to maturity is 6.0 percent?

(Multiple Choice)

4.8/5

(79)

Question 34

A $1,000 semiannual coupon bond matures in 15 years,has a coupon rate of 7.5 percent,and a market price of $982.What is the yield to maturity?

(Multiple Choice)

4.9/5

(71)

Question 35

Which one of the following will occur if a bond's discount rate is lowered?

(Multiple Choice)

4.9/5

(87)

Question 36

A basic bond that has a face value of $1,000 and pays regular semiannual coupon payments is referred to as which one of the following?

(Multiple Choice)

4.8/5

(85)

Question 37

Which one of the following does an issuer pay to redeem a bond prior to maturity?

(Multiple Choice)

4.7/5

(76)

Question 38

A premium bond is defined as a bond that:

(Multiple Choice)

4.8/5

(82)

Question 39

Price risk is the risk that:

(Multiple Choice)

4.8/5

(77)

Question 40

Showing 21 - 40 of 100

Ted owns a bond which is callable in 2.5 years.The bond has a 6 percent coupon,pays interest semiannually,has a par value of $1,000,and has a yield to call of 6.3 percent.What is the call premium if the bond currently sells for $1,044.54?

You own a bond that pays semiannual interest payments of $38.The bond is callable in 2 years at a premium of $76.What is the callable bond price if the yield to call is 7.9 percent?

A bond has a current yield that is equal to the yield-to-maturity.Given this,which one of the following must also be true?

A discount bond:

You are buying a bond at a quoted price of $892.The bond has a 7.5 percent coupon and pays interest semiannually on February 1 and August 1.What is the dirty price of this bond if today is April 1? Assume a 360-day year.

An issuer has a bond outstanding that matures in 18 years.Which one of the following prevents the issuer from buying back that bond today?

The rate of return an investor actually earns from owning a bond is called which one of the following?

A bond has a par value of $1,000 and a coupon rate of 6.5 percent.What is the dollar amount of each semiannual interest payment if you own 8 of these bonds?

A $1,000 face value bond has a 9.0 percent coupon and pays interest semiannually.The bond matures in 2 years and has a yield to maturity of 6.5 percent.What is the Macaulay duration?

A bond has a Macaulay duration of 4.5,a yield to maturity of 5.1 percent,a coupon rate of 6.0 percent,and semiannual interest payments.What is the bond's modified duration?

To immunize your portfolio,you should:

A bond has a modified duration of 5.87 years,a par value of $1,000,and a current market value of $1,008.What is the dollar value of an 01?

Blue Water Homes has 8 percent bonds outstanding that mature in 13 years.The bonds pay interest semiannually.These bonds have a par value of $1,000 and are callable in 2 years at a premium of $75.What is the yield to call if the current price is equal to 103.25 percent of par?

The Country Inn has bonds outstanding with a par value of $1,000 each and a 5.25 percent coupon.The bonds mature in 8.5 years and pay interest semiannually.What is the current value of each of these bonds if the yield to maturity is 6.0 percent?

A $1,000 semiannual coupon bond matures in 15 years,has a coupon rate of 7.5 percent,and a market price of $982.What is the yield to maturity?

Which one of the following will occur if a bond's discount rate is lowered?

A basic bond that has a face value of $1,000 and pays regular semiannual coupon payments is referred to as which one of the following?

Which one of the following does an issuer pay to redeem a bond prior to maturity?

A premium bond is defined as a bond that:

Price risk is the risk that:

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