Question 1

An $8000 bond pays semi-annual coupons of $380 every April 15 and October 15.The bond is bought on August 15 for a full price of $8214.79.What is the quoted price per $100,q?

Accepted Answer

A) 105.85 
B) 99.52 
C) 84.68 
D) 79.61 
A) 105.85 
B) 99.52 
C) 84.68 
D) 79.61

Question 2

A $1000 bond with semi-annual coupons at j2 = 12% matures on April 16,2010 at 105.If the price on April 16,2005 was $1080,what is the yield j2 by the method of averages?

Accepted Answer

A) 11.83% 
B) 10.70% 
C) 5.92% 
D) 5.35% 
A) 11.83% 
B) 10.70% 
C) 5.92% 
D) 5.35%

Question 3

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j2 = 4%.What is the price to yield j2 = 5%?

Accepted Answer

A) $7735.69 
B) $9430.09 
C) $9541.62 
D) $9598.65 
A) $7735.69 
B) $9430.09 
C) $9541.62 
D) $9598.65

Question 4

A $20,000 bond is purchased that matures in 10 years.The bond is redeemable at par.This bond has coupons payable quarterly and the quarterly coupon amount is $400.What is the current market value of the bond if 10 year bonds are being priced today to yield j2 = 6%? (Answer to the nearest dollar)

Accepted Answer

A) $17,025 
B) $20,000 
C) $21,040 
D) $23,064 
A) $17,025 
B) $20,000 
C) $21,040 
D) $23,064

Question 5

A $5000 bond pays semi-annual coupons of $150 every April 30th and October 30th.The redemption value is $5075.It is purchased on July 5,2010 at a market (clean)price $5125.What is the full (or dirty)price?

Accepted Answer

A) $5054.10 
B) $5070.90 
C) $5129.10 
D) $5179.10 
A) $5054.10 
B) $5070.90 
C) $5129.10 
D) $5179.10

Question 6

Jim buys an 8 year $10,000 bond paying interest at j2 = 6%.The bond is redeemable at 98.5.Jim strips off the coupons and sells the strip bond to Kim,who desires a yield of j12 = 6%.What price does Kim pay for the bond?

Accepted Answer

A) $6231.67 
B) $6195.24 
C) $6138.19 
D) $6102.31 
A) $6231.67 
B) $6195.24 
C) $6138.19 
D) $6102.31

Question 7

A $1500 bond was purchased between bond coupon dates for a purchase price (full or dirty price)of $1457.98.The accrued interest on the date of sale was $71.80.What price is the bond quoted at per $100 (q)on the date of sale?

Accepted Answer

A) 92.41 
B) 101.99 
C) 138.62 
D) 152.98 
A) 92.41 
B) 101.99 
C) 138.62 
D) 152.98

Question 8

A $1000 bond pays semi-annual coupons of $30 every March 1 and September 1.It sells for $1043.76 on March 1,2015 to yield j2 = 5%.If the bond is sold on June 18,2015,what is the market (clean)price.Q,of the bond on that day?

Accepted Answer

A) $1076.91 
B) $1061.53 
C) $1059.14 
D) $1041.37 
A) $1076.91 
B) $1061.53 
C) $1059.14 
D) $1041.37

Question 9

A $1000 bond is redeemable at 104.5.The bond is bought such that yield rate > bond rate.The absolute value of the sum of the book value adjustment column is $38.75.What is the price of the bond?

Accepted Answer

A) $961.25 
B) $1006.25 
C) $1038.75 
D) $1083.75 
A) $961.25 
B) $1006.25 
C) $1038.75 
D) $1083.75

Question 10

A $1200 bond with semi-annual coupons at j2 = 6% is sold at q = 97 on August 2,2010.It is bought at q = 85 on February 2,2003,with the first coupon due August 2,2003.Using the method of averages,what is the yield rate,j2?

Accepted Answer

A) 8.35% 
B) 8.48% 
C) 9.67% 
D) 9.80% 
A) 8.35% 
B) 8.48% 
C) 9.67% 
D) 9.80%

Question 11

For a $10,000 bond with semi-annual coupons,you are given the following:
• The redemption value is $10,400
• The book value one period before the redemption date is $10,347.57
• Interest on the book value in the last coupon period is $369.93
What is the bond coupon rate,j2?

Accepted Answer

A) 6.35% 
B) 7.15% 
C) 7.40% 
D) 8.45% 
A) 6.35% 
B) 7.15% 
C) 7.40% 
D) 8.45%

Question 12

A $2200 bond pays quarterly coupons of $44 and is redeemable at 107 on March 15,2018.It is quoted for sale at 106.8476 on May 2,2010.What price does the bond actually sell for on May 2,2010?

Accepted Answer

A) $2327.69 
B) $2350.65 
C) $2362.13 
D) $2373.60 
A) $2327.69 
B) $2350.65 
C) $2362.13 
D) $2373.60

Question 13

A $1000 bond with semi-annual coupons is redeemable for $960 in 6 years.The write-down (book value adjustment)in the first coupon period is $1.79.What is the price of the bond in order to yield j2 = 10%?

Accepted Answer

A) $931.51 
B) $971.51 
C) $988.49 
D) $1028.49 
A) $931.51 
B) $971.51 
C) $988.49 
D) $1028.49

Question 14

A $1000 bond with semi-annual coupons at j2 = 8% maturing at par in 10 years is callable at the end of 5 years at 102.What is the maximum purchase price an investor would be willing to pay in order to yield at least j2 = 7%?

Accepted Answer

A) $1041.58 
B) $1055.76 
C) $1061.58 
D) $1071.06 
A) $1041.58 
B) $1055.76 
C) $1061.58 
D) $1071.06

Question 15

A $10,000 bond pays coupons at j2 = 10% every January 1 (day 1)and July 1 (day 182).It is purchased on March 15,2010 (day 74)to yield j2 = 11%.The full (or dirty)price of the bond on March 15,2010 is $9578.38.What would be the price of the bond on the coupon date,January 1,2010?

Accepted Answer

A) $9370.52 
B) $9372.12 
C) $9373.76 
D) $9787.46 
A) $9370.52 
B) $9372.12 
C) $9373.76 
D) $9787.46

Question 16

A bond with $40 coupons every 6 months is purchased at a discount to yield j2 = 8%.If the absolute value of the write-up for the first year is $10,what is the purchase price of the bond?

Accepted Answer

A) $750 
B) $1250 
C) $1500 
D) $2500 
A) $750 
B) $1250 
C) $1500 
D) $2500

Question 17

A $1000 bond with semi-annual coupons is redeemable for $1040.The absolute value of the sum of the write down column (book value adjustment column)is $69.30.What is the price of the bond?

Accepted Answer

A) $1109.30 
B) $1069.30 
C) $970.70 
D) $930.70 
A) $1109.30 
B) $1069.30 
C) $970.70 
D) $930.70

Question 18

A 20-year $10,000 bond is redeemable at par and pays interest at j2 = 8% and is purchased to yield j2 = 6%.After 8 years,the bond is sold to an investor who desires a yield of j2 = 7%.What price does this investor pay for the bond?

Accepted Answer

A) $12,311.48 
B) $11,693.55 
C) $11,067.75 
D) $10,802.92 
A) $12,311.48 
B) $11,693.55 
C) $11,067.75 
D) $10,802.92

Question 19

A bond,paying semi-annual coupons of $60,is purchased at a discount to yield j2 = 13%.The book value adjustment in the 6th coupon period is -$10.80.What is the interest on the book value for the 11th coupon,I11?

Accepted Answer

A) $45.20 
B) $52.12 
C) $67.88 
D) $74.80 
A) $45.20 
B) $52.12 
C) $67.88 
D) $74.80

Question 20

A $10,000 bond pays semi-annual coupons at j2 = 10% every January 5 and July 5.It is purchased on February 5,2010 to yield j2 = 11%.The full (or dirty)price of the bond on February 5,2010 is $9578.38.Using the method that is most commonly used in practice,what would be the price of the bond on the coupon date,January 5,2010?

Accepted Answer

A) $9488.99 
B) $9490.95 
C) $9493.29 
D) $9498.67 
A) $9488.99 
B) $9490.95 
C) $9493.29 
D) $9498.67

An $8000 bond pays semi-annual coupons of $380 every April 15 and October 15.The bond is bought on August 15 for a full price of $8214.79.What is the quoted price per $100,q?

A $1000 bond with semi-annual coupons at j₂ = 12% matures on April 16,2010 at 105.If the price on April 16,2005 was $1080,what is the yield j₂ by the method of averages?

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j₂ = 4%.What is the price to yield j₂ = 5%?

A $20,000 bond is purchased that matures in 10 years.The bond is redeemable at par.This bond has coupons payable quarterly and the quarterly coupon amount is $400.What is the current market value of the bond if 10 year bonds are being priced today to yield j₂ = 6%? (Answer to the nearest dollar)

A $5000 bond pays semi-annual coupons of $150 every April 30^th and October 30^th.The redemption value is $5075.It is purchased on July 5,2010 at a market (clean)price $5125.What is the full (or dirty)price?

Jim buys an 8 year $10,000 bond paying interest at j₂ = 6%.The bond is redeemable at 98.5.Jim strips off the coupons and sells the strip bond to Kim,who desires a yield of j₁₂ = 6%.What price does Kim pay for the bond?

A $1500 bond was purchased between bond coupon dates for a purchase price (full or dirty price)of $1457.98.The accrued interest on the date of sale was $71.80.What price is the bond quoted at per $100 (q)on the date of sale?

A $1000 bond pays semi-annual coupons of $30 every March 1 and September 1.It sells for $1043.76 on March 1,2015 to yield j₂ = 5%.If the bond is sold on June 18,2015,what is the market (clean)price.Q,of the bond on that day?

A $1000 bond is redeemable at 104.5.The bond is bought such that yield rate > bond rate.The absolute value of the sum of the book value adjustment column is $38.75.What is the price of the bond?

A $1200 bond with semi-annual coupons at j₂ = 6% is sold at q = 97 on August 2,2010.It is bought at q = 85 on February 2,2003,with the first coupon due August 2,2003.Using the method of averages,what is the yield rate,j₂?

For a $10,000 bond with semi-annual coupons,you are given the following: • The redemption value is $10,400 • The book value one period before the redemption date is $10,347.57 • Interest on the book value in the last coupon period is $369.93 What is the bond coupon rate,j₂?

A $2200 bond pays quarterly coupons of $44 and is redeemable at 107 on March 15,2018.It is quoted for sale at 106.8476 on May 2,2010.What price does the bond actually sell for on May 2,2010?

A $1000 bond with semi-annual coupons is redeemable for $960 in 6 years.The write-down (book value adjustment)in the first coupon period is $1.79.What is the price of the bond in order to yield j₂ = 10%?

A $1000 bond with semi-annual coupons at j₂ = 8% maturing at par in 10 years is callable at the end of 5 years at 102.What is the maximum purchase price an investor would be willing to pay in order to yield at least j₂ = 7%?

A $10,000 bond pays coupons at j₂ = 10% every January 1 (day 1)and July 1 (day 182).It is purchased on March 15,2010 (day 74)to yield j₂ = 11%.The full (or dirty)price of the bond on March 15,2010 is $9578.38.What would be the price of the bond on the coupon date,January 1,2010?

A bond with $40 coupons every 6 months is purchased at a discount to yield j₂= 8%.If the absolute value of the write-up for the first year is $10,what is the purchase price of the bond?

A $1000 bond with semi-annual coupons is redeemable for $1040.The absolute value of the sum of the write down column (book value adjustment column)is $69.30.What is the price of the bond?

A 20-year $10,000 bond is redeemable at par and pays interest at j₂ = 8% and is purchased to yield j₂ = 6%.After 8 years,the bond is sold to an investor who desires a yield of j₂ = 7%.What price does this investor pay for the bond?

A bond,paying semi-annual coupons of $60,is purchased at a discount to yield j₂ = 13%.The book value adjustment in the 6^th coupon period is -$10.80.What is the interest on the book value for the 11^th coupon,I₁₁?

Simple Interest and Simple Discount

Compound Interest

Simple Annuities

General and Other Annuities

Repayment of Debts

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

Exam 6: Bonds

An $8000 bond pays semi-annual coupons of $380 every April 15 and October 15.The bond is bought on August 15 for a full price of $8214.79.What is the quoted price per $100,q?

A $1000 bond with semi-annual coupons at j2 = 12% matures on April 16,2010 at 105.If the price on April 16,2005 was $1080,what is the yield j2 by the method of averages?

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j2 = 4%.What is the price to yield j2 = 5%?

A $20,000 bond is purchased that matures in 10 years.The bond is redeemable at par.This bond has coupons payable quarterly and the quarterly coupon amount is $400.What is the current market value of the bond if 10 year bonds are being priced today to yield j2 = 6%? (Answer to the nearest dollar)

A $5000 bond pays semi-annual coupons of $150 every April 30th and October 30th.The redemption value is $5075.It is purchased on July 5,2010 at a market (clean)price $5125.What is the full (or dirty)price?

Jim buys an 8 year $10,000 bond paying interest at j2 = 6%.The bond is redeemable at 98.5.Jim strips off the coupons and sells the strip bond to Kim,who desires a yield of j12 = 6%.What price does Kim pay for the bond?

A $1500 bond was purchased between bond coupon dates for a purchase price (full or dirty price)of $1457.98.The accrued interest on the date of sale was $71.80.What price is the bond quoted at per $100 (q)on the date of sale?

A $1000 bond pays semi-annual coupons of $30 every March 1 and September 1.It sells for $1043.76 on March 1,2015 to yield j2 = 5%.If the bond is sold on June 18,2015,what is the market (clean)price.Q,of the bond on that day?

A $1000 bond is redeemable at 104.5.The bond is bought such that yield rate > bond rate.The absolute value of the sum of the book value adjustment column is $38.75.What is the price of the bond?

A $1200 bond with semi-annual coupons at j2 = 6% is sold at q = 97 on August 2,2010.It is bought at q = 85 on February 2,2003,with the first coupon due August 2,2003.Using the method of averages,what is the yield rate,j2?

For a $10,000 bond with semi-annual coupons,you are given the following: • The redemption value is $10,400 • The book value one period before the redemption date is $10,347.57 • Interest on the book value in the last coupon period is $369.93 What is the bond coupon rate,j2?

A $2200 bond pays quarterly coupons of $44 and is redeemable at 107 on March 15,2018.It is quoted for sale at 106.8476 on May 2,2010.What price does the bond actually sell for on May 2,2010?

A $1000 bond with semi-annual coupons is redeemable for $960 in 6 years.The write-down (book value adjustment)in the first coupon period is $1.79.What is the price of the bond in order to yield j2 = 10%?

A $1000 bond with semi-annual coupons at j2 = 8% maturing at par in 10 years is callable at the end of 5 years at 102.What is the maximum purchase price an investor would be willing to pay in order to yield at least j2 = 7%?

A $10,000 bond pays coupons at j2 = 10% every January 1 (day 1)and July 1 (day 182).It is purchased on March 15,2010 (day 74)to yield j2 = 11%.The full (or dirty)price of the bond on March 15,2010 is $9578.38.What would be the price of the bond on the coupon date,January 1,2010?

A bond with $40 coupons every 6 months is purchased at a discount to yield j2 = 8%.If the absolute value of the write-up for the first year is $10,what is the purchase price of the bond?

A $1000 bond with semi-annual coupons is redeemable for $1040.The absolute value of the sum of the write down column (book value adjustment column)is $69.30.What is the price of the bond?

A 20-year $10,000 bond is redeemable at par and pays interest at j2 = 8% and is purchased to yield j2 = 6%.After 8 years,the bond is sold to an investor who desires a yield of j2 = 7%.What price does this investor pay for the bond?

A bond,paying semi-annual coupons of $60,is purchased at a discount to yield j2 = 13%.The book value adjustment in the 6th coupon period is -$10.80.What is the interest on the book value for the 11th coupon,I11?

Simple Interest and Simple Discount

Compound Interest

Simple Annuities

General and Other Annuities

Repayment of Debts

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

A $1000 bond with semi-annual coupons at j₂ = 12% matures on April 16,2010 at 105.If the price on April 16,2005 was $1080,what is the yield j₂ by the method of averages?

A 6-year accumulation bond with face value $10,000 and redemption value $10,150,reinvests the semi-annual coupons in the bond and pays the accumulated value of them out upon redemption,along with the redemption value.The bond pays interest at j₂ = 4%.What is the price to yield j₂ = 5%?

A $20,000 bond is purchased that matures in 10 years.The bond is redeemable at par.This bond has coupons payable quarterly and the quarterly coupon amount is $400.What is the current market value of the bond if 10 year bonds are being priced today to yield j₂ = 6%? (Answer to the nearest dollar)

A $5000 bond pays semi-annual coupons of $150 every April 30^th and October 30^th.The redemption value is $5075.It is purchased on July 5,2010 at a market (clean)price $5125.What is the full (or dirty)price?

Jim buys an 8 year $10,000 bond paying interest at j₂ = 6%.The bond is redeemable at 98.5.Jim strips off the coupons and sells the strip bond to Kim,who desires a yield of j₁₂ = 6%.What price does Kim pay for the bond?

A $1000 bond pays semi-annual coupons of $30 every March 1 and September 1.It sells for $1043.76 on March 1,2015 to yield j₂ = 5%.If the bond is sold on June 18,2015,what is the market (clean)price.Q,of the bond on that day?

A $1200 bond with semi-annual coupons at j₂ = 6% is sold at q = 97 on August 2,2010.It is bought at q = 85 on February 2,2003,with the first coupon due August 2,2003.Using the method of averages,what is the yield rate,j₂?

For a $10,000 bond with semi-annual coupons,you are given the following: • The redemption value is $10,400 • The book value one period before the redemption date is $10,347.57 • Interest on the book value in the last coupon period is $369.93 What is the bond coupon rate,j₂?

A $1000 bond with semi-annual coupons is redeemable for $960 in 6 years.The write-down (book value adjustment)in the first coupon period is $1.79.What is the price of the bond in order to yield j₂ = 10%?

A $1000 bond with semi-annual coupons at j₂ = 8% maturing at par in 10 years is callable at the end of 5 years at 102.What is the maximum purchase price an investor would be willing to pay in order to yield at least j₂ = 7%?

A $10,000 bond pays coupons at j₂ = 10% every January 1 (day 1)and July 1 (day 182).It is purchased on March 15,2010 (day 74)to yield j₂ = 11%.The full (or dirty)price of the bond on March 15,2010 is $9578.38.What would be the price of the bond on the coupon date,January 1,2010?

A bond with $40 coupons every 6 months is purchased at a discount to yield j₂= 8%.If the absolute value of the write-up for the first year is $10,what is the purchase price of the bond?

A 20-year $10,000 bond is redeemable at par and pays interest at j₂ = 8% and is purchased to yield j₂ = 6%.After 8 years,the bond is sold to an investor who desires a yield of j₂ = 7%.What price does this investor pay for the bond?

A bond,paying semi-annual coupons of $60,is purchased at a discount to yield j₂ = 13%.The book value adjustment in the 6^th coupon period is -$10.80.What is the interest on the book value for the 11^th coupon,I₁₁?