Exam 10: Bond Prices and Yields

The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of $33.50 on a $1,000 face value bond.The bonds are currently selling for $1,008.64.The coupon rate is ___ percent,the current yield is _ percent,and the yield to maturity is ___ percent.

(Multiple Choice)

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Question 41

A bond has a face value of $1,000 and a coupon rate of 5.5 percent.What is your annual interest payment if you own 8 of these bonds?

(Multiple Choice)

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(80)

Question 42

Green Roofing Materials has 7.5 percent bonds outstanding that are currently priced at $1,068 each.The bonds pay interest on December 1 and June 1.What is the dirty price of this bond if today's date is May 1? Assume a 360-day year.

(Multiple Choice)

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Question 43

Which of the following will increase if the coupon rate increases? I.face value II.market value III.yield-to-maturity IV.current yield

(Multiple Choice)

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Question 44

All else constant,which of the following will decrease the Macaulay duration of a straight bond? I.reducing the coupon payment II.shortening the time to maturity III.lowering the yield to maturity

(Multiple Choice)

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(80)

Question 45

Which one of the following statements is correct concerning discount bonds?

(Multiple Choice)

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Question 46

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?

(Multiple Choice)

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Question 47

Which one of the following must be equal for two bonds if they are to have similar changes in their prices given a relatively small change in bond yields?

(Multiple Choice)

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Question 48

The modified duration:

(Multiple Choice)

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Question 49

A bond has a Macaulay duration of 6.25 years.What will be the percentage change in the bond price if the yield to maturity increases from 6 percent to 6.4 percent?

(Multiple Choice)

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Question 50

A bond has a modified duration of 7.22 and a yield to maturity of 8.1 percent.If interest rates increase by 75 basis points,the bond's price will decrease by _____ percent.

(Multiple Choice)

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(81)

Question 51

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)

4.8/5

(83)

Question 52

Cochran's Furniture Outlet is issuing 25-year,9 percent callable bonds.These bonds are callable in 4 years with a call premium of $45.The bonds are being issued at par and pay interest semi-annually.What is the yield to call?

(Multiple Choice)

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(86)

Question 53

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

(Multiple Choice)

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(62)

Question 54

A 6 percent,semiannual coupon bond has a yield to maturity of 7.4 percent and a Macaulay duration of 5.7.The bond has a modified duration of _ and will have a _ percentage increase in price in response to a 25 basis point decrease in the yield to maturity.

(Multiple Choice)

4.9/5

(79)

Question 55

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)

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(90)

Question 56

A bond has a Macaulay duration of 5.5,a yield to maturity of 6.1 percent,a coupon rate of 7.0 percent,and semiannual interest payments.What is the bond's modified duration?

(Multiple Choice)

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(67)

Question 57

Last year,you created an immunized portfolio with an average maturity date of 14.5 years,a yield-to-maturity of 9.8 percent,and a duration of 9.6 years.According to the policy of dynamic immunization,you should now modify your portfolio in which one of the following ways?

(Multiple Choice)

5.0/5

(83)

Question 58

One year ago,you purchased a $1,000 face value bond at a yield to maturity of 9.45 percent.The bond has a 9 percent coupon and pays interest semiannually.When you purchased the bond,it had 12 years left until maturity.You are selling the bond today when the yield to maturity is 8.20 percent.What is your realized yield on this bond?

(Multiple Choice)

4.7/5

(72)

Question 59

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?

(Multiple Choice)

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(82)

Question 60

Showing 41 - 60 of 95

The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of $33.50 on a $1,000 face value bond.The bonds are currently selling for $1,008.64.The coupon rate is ___ percent,the current yield is _ percent,and the yield to maturity is ___ percent.

A bond has a face value of $1,000 and a coupon rate of 5.5 percent.What is your annual interest payment if you own 8 of these bonds?

Green Roofing Materials has 7.5 percent bonds outstanding that are currently priced at $1,068 each.The bonds pay interest on December 1 and June 1.What is the dirty price of this bond if today's date is May 1? Assume a 360-day year.

Which of the following will increase if the coupon rate increases? I.face value II.market value III.yield-to-maturity IV.current yield

All else constant,which of the following will decrease the Macaulay duration of a straight bond? I.reducing the coupon payment II.shortening the time to maturity III.lowering the yield to maturity

Which one of the following statements is correct concerning discount bonds?

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 must be equal for two bonds if they are to have similar changes in their prices given a relatively small change in bond yields?

The modified duration:

A bond has a Macaulay duration of 6.25 years.What will be the percentage change in the bond price if the yield to maturity increases from 6 percent to 6.4 percent?

A bond has a modified duration of 7.22 and a yield to maturity of 8.1 percent.If interest rates increase by 75 basis points,the bond's price will decrease by _____ percent.

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?

Cochran's Furniture Outlet is issuing 25-year,9 percent callable bonds.These bonds are callable in 4 years with a call premium of $45.The bonds are being issued at par and pay interest semi-annually.What is the yield to call?

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

A 6 percent,semiannual coupon bond has a yield to maturity of 7.4 percent and a Macaulay duration of 5.7.The bond has a modified duration of _ and will have a _ percentage increase in price in response to a 25 basis point decrease in the yield to maturity.

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 5.5,a yield to maturity of 6.1 percent,a coupon rate of 7.0 percent,and semiannual interest payments.What is the bond's modified duration?

Last year,you created an immunized portfolio with an average maturity date of 14.5 years,a yield-to-maturity of 9.8 percent,and a duration of 9.6 years.According to the policy of dynamic immunization,you should now modify your portfolio in which one of the following ways?

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?

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

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Exam 10: Bond Prices and Yields

The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of $33.50 on a $1,000 face value bond.The bonds are currently selling for $1,008.64.The coupon rate is _____ percent,the current yield is _____ percent,and the yield to maturity is _____ percent.

A bond has a face value of $1,000 and a coupon rate of 5.5 percent.What is your annual interest payment if you own 8 of these bonds?

Green Roofing Materials has 7.5 percent bonds outstanding that are currently priced at $1,068 each.The bonds pay interest on December 1 and June 1.What is the dirty price of this bond if today's date is May 1? Assume a 360-day year.

Which of the following will increase if the coupon rate increases? I.face value II.market value III.yield-to-maturity IV.current yield

All else constant,which of the following will decrease the Macaulay duration of a straight bond? I.reducing the coupon payment II.shortening the time to maturity III.lowering the yield to maturity

Which one of the following statements is correct concerning discount bonds?

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 must be equal for two bonds if they are to have similar changes in their prices given a relatively small change in bond yields?

The modified duration:

A bond has a Macaulay duration of 6.25 years.What will be the percentage change in the bond price if the yield to maturity increases from 6 percent to 6.4 percent?

A bond has a modified duration of 7.22 and a yield to maturity of 8.1 percent.If interest rates increase by 75 basis points,the bond's price will decrease by _____ percent.

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?

Cochran's Furniture Outlet is issuing 25-year,9 percent callable bonds.These bonds are callable in 4 years with a call premium of $45.The bonds are being issued at par and pay interest semi-annually.What is the yield to call?

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

A 6 percent,semiannual coupon bond has a yield to maturity of 7.4 percent and a Macaulay duration of 5.7.The bond has a modified duration of _____ and will have a _____ percentage increase in price in response to a 25 basis point decrease in the yield to maturity.

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 5.5,a yield to maturity of 6.1 percent,a coupon rate of 7.0 percent,and semiannual interest payments.What is the bond's modified duration?

Last year,you created an immunized portfolio with an average maturity date of 14.5 years,a yield-to-maturity of 9.8 percent,and a duration of 9.6 years.According to the policy of dynamic immunization,you should now modify your portfolio in which one of the following ways?

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?

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

The outstanding bonds of International Plastics mature in 6 years and pay semiannual interest payments of $33.50 on a $1,000 face value bond.The bonds are currently selling for $1,008.64.The coupon rate is ___ percent,the current yield is _ percent,and the yield to maturity is ___ percent.

A 6 percent,semiannual coupon bond has a yield to maturity of 7.4 percent and a Macaulay duration of 5.7.The bond has a modified duration of _ and will have a _ percentage increase in price in response to a 25 basis point decrease in the yield to maturity.