A) Command Duty Supervisor B) collateralized debt security C) commercial debt servicer D) collateralized debenture security E) credit default swap A) Command Duty Supervisor B) collateralized debt security C) commercial debt servicer D) collateralized debenture security E) credit default swap

Exam 14: Bond Prices and Yields

A convertible bond has a par value of $1,000 and a current market value of $1150.The current price of the issuing firm's stock is $65 and the conversion ratio is 15 shares.The bond's conversion premium is _________.

(Multiple Choice)

4.8/5

(81)

Question 21

You purchased an annual interest coupon bond one year ago that had 6 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 _________.

(Multiple Choice)

5.0/5

(84)

Question 22

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%.

(Multiple Choice)

4.8/5

(74)

Question 23

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?

(Multiple Choice)

4.9/5

(82)

Question 24

You have just purchased a 12-year zero-coupon bond with a yield to maturity of 9% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 10% at the time you sell.

(Multiple Choice)

4.9/5

(80)

Question 25

A bond will sell at a discount when __________.

(Multiple Choice)

4.9/5

(77)

Question 26

A CDS is a

(Multiple Choice)

4.8/5

(81)

Question 27

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 12%.

(Multiple Choice)

4.9/5

(78)

Question 28

A convertible bond has a par value of $1,000 and a current market price of $1105.The current price of the issuing firm's stock is $20 and the conversion ratio is 35 shares.The bond's market conversion value is ______.

(Multiple Choice)

4.9/5

(83)

Question 29

You have just purchased a 10-year zero-coupon bond with a yield to maturity of 10% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 11% at the time you sell.

(Multiple Choice)

4.8/5

(82)

Question 30

You purchased an annual interest coupon bond one year ago that now has 18 years remaining until maturity.The coupon rate of interest was 11% and par value was $1,000.At the time you purchased the bond,the yield to maturity was 10%.The amount you paid for this bond one year ago was

(Multiple Choice)

4.7/5

(92)

Question 31

Floating-rate bonds are designed to _ while convertible bonds are designed to .

(Multiple Choice)

4.9/5

(85)

Question 32

A coupon bond that pays interest annually is selling at par value of $1,000,matures in 5 years,and has a coupon rate of 9%.The yield to maturity on this bond is:

(Multiple Choice)

4.8/5

(77)

Question 33

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?

(Multiple Choice)

4.9/5

(64)

Question 34

Consider two bonds,A and B.Both bonds presently are selling at their par value of $1,000.Each pays interest of $120 annually.Bond A will mature in 5 years while bond B will mature in 6 years.If the yields to maturity on the two bonds change from 12% to 10%,____________.

(Multiple Choice)

4.9/5

(64)

Question 35

A firm with a low rating from the bond rating agencies would have

(Multiple Choice)

5.0/5

(74)

Question 36

A Treasury bond due in one year has a yield of 5.7%; a Treasury bond due in 5 years has a yield of 6.2%.A bond issued by Ford Motor Company due in 5 years has a yield of 7.5%; a bond issued by Shell Oil due in one year has a yield of 6.5%.The default risk premiums on the bonds issued by Shell and Ford,respectively,are

(Multiple Choice)

4.8/5

(72)

Question 37

A coupon bond pays annual interest,has a par value of $1,000,matures in 4 years,has a coupon rate of 8.25%,and has a yield to maturity of 8.64%.The current yield on this bond is ___________.

(Multiple Choice)

4.9/5

(69)

Question 38

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

(Multiple Choice)

4.9/5

(67)

Question 39

A coupon bond that pays interest semi-annually is selling at par value of $1,000,matures in 7 years,and has a coupon rate of 8.6%.The yield to maturity on this bond is:

(Multiple Choice)

4.9/5

(85)

Question 40

Showing 21 - 40 of 129

Exam 14: Bond Prices and Yields

A convertible bond has a par value of $1,000 and a current market value of $1150.The current price of the issuing firm's stock is $65 and the conversion ratio is 15 shares.The bond's conversion premium is _________.

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 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?

You have just purchased a 12-year zero-coupon bond with a yield to maturity of 9% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 10% at the time you sell.

A bond will sell at a discount when __________.

A CDS is a

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 12%.

A convertible bond has a par value of $1,000 and a current market price of $1105.The current price of the issuing firm's stock is $20 and the conversion ratio is 35 shares.The bond's market conversion value is ______.

You have just purchased a 10-year zero-coupon bond with a yield to maturity of 10% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 11% at the time you sell.

You purchased an annual interest coupon bond one year ago that now has 18 years remaining until maturity.The coupon rate of interest was 11% and par value was $1,000.At the time you purchased the bond,the yield to maturity was 10%.The amount you paid for this bond one year ago was

Floating-rate bonds are designed to ___________ while convertible bonds are designed to __________.

A coupon bond that pays interest annually is selling at par value of $1,000,matures in 5 years,and has a coupon rate of 9%.The yield to maturity on this bond is:

Consider two bonds,A and B.Both bonds presently are selling at their par value of $1,000.Each pays interest of $120 annually.Bond A will mature in 5 years while bond B will mature in 6 years.If the yields to maturity on the two bonds change from 12% to 10%,____________.

A firm with a low rating from the bond rating agencies would have

A coupon bond pays annual interest,has a par value of $1,000,matures in 4 years,has a coupon rate of 8.25%,and has a yield to maturity of 8.64%.The current yield on this bond is ___________.

A coupon bond is reported as having an ask price of 113% of the $1,000 par value in the Wall Street Journal.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 semi-annually is selling at par value of $1,000,matures in 7 years,and has a coupon rate of 8.6%.The yield to maturity on this bond is:

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Introduction to Risk,return,and the Historical Record

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters

Floating-rate bonds are designed to _ while convertible bonds are designed to .