Question 1

From his retirement fund, Jack buys a $50 000, 5.4% bond with quarterly interest coupons at 104.1, redeemable at par in 15 years. What is the approximate yield rate?

Accepted Answer

A) 1.256% 
B) 5.024% 
C) 1.23% 
D) 4.92% 
E) 5.19%

Question 2

A $1000, 6% bond redeemable at par with semi-annual coupons was purchased 10 years before maturity to yield 5% compounded semi-annually. The bond was sold 3 years later at 102. Calculate the gain or loss on the sale of the bond.

Accepted Answer

The answer of A $1000, 6% bond redeemable at par...

Question 3

A 4.5% annuity bond of $500 000 with interest payable quarterly is to be redeemable at par in seven years.
a)What is the purchase price to yield 6% compounded quarterly?
b)What is the book value after 6 years?
c)What is the gain or loss if the bond is sold six years after the date of purchase at

Accepted Answer

The answer of A 4.5% annuity bond of $500 000...

Question 4

Nick buys a $25 000, 5.4% bond with quarterly interest coupons, 3 years before maturity, to yield 7% compounded quarterly. The bond was sold a year later at 102. What is the gain or loss on the sale of the bond?

Accepted Answer

A) $740.51 gain 
B) $740.51 loss 
C) $1240.50 gain 
D) $1240.50 loss 
E) $500 gain

Question 5

Bonds with a face value of $130 000 redeemable at par bearing 4.5% coupons payable quarterly are sold six years before maturity to yield 5.25% quarterly. Determine
a)the premium or discount;
b)the purchase price?

Accepted Answer

The answer of Bonds with a face value of $130...

Question 6

A $25 000, 8% bond with semi-annual coupons, redeemable at par in 12 years, is purchased to yield 6% compounded semi-annually. Determine the gain or loss if the bond is sold two years later at 107.25.

Accepted Answer

The answer of A $25 000, 8% bond with semi-annual...

Question 7

What is the amount of premium/discount amortized or accumulated for the second payment interval of a $1500 bond that sold for $1627.32? The bond rate is 6.95% compounded semi-annually and the yield rate is 6% compounded semi-annually.

Accepted Answer

A) $4.30 
B) $5.30 
C) $1.40 
D) $3.40 
E) $2.30

Question 8

Bonds in denominations of $10 000 redeemable at par in six years and four months are offered for sale. If the coupon rate is 6.5% payable quarterly and the expected yield is 8% compounded quarterly, determine
a)the market price;
b)the accrued interest;
c)the cash price.

Accepted Answer

The answer of Bonds in denominations of $10 000 redeemable...

Question 9

A $40 000.00, 5% bond with semi-annual coupons redeemable at par in 14 years is purchased to yield 7% compounded semi-annually. What is the gain or loss if the bond is sold three years before maturity at 99.75?

Accepted Answer

The answer of A $40 000.00, 5% bond with semi-annual...

Question 10

A $10 000.00, 5% bond with semi-annual coupons redeemable at 105 in 23 years is purchased at 102.5. What is the approximate yield rate?

Accepted Answer

The answer of A $10 000.00, 5% bond with semi-annual...

Question 11

A $50 000 bond bearing interest at 6.5% bond payable semi-annually matures in 10 years. If it is bought to yield 5.7% compounded semi-annually, what is the purchase price of the bond?

Accepted Answer

The answer of A $50 000 bond bearing interest at...

Question 12

What is the amount of premium/discount for a bond that has 4 years till it matures? The face value of the bond is $100 000 and it has a bond rate of 6.4% compounded semi-annually. The bond is sold to yield 7.4% compounded semi-annually.

Accepted Answer

A) $3084.47 
B) $3840.47 
C) $3048.47 
D) $3408.47 
E) $3184.47

Question 13

A $10 000, 8.5% bond with semi-annual coupons redeemable at par on March 1, 2005, was purchased on September 22, 1997, to yield 10.06% compounded semi-annually. What was the purchase price?

Accepted Answer

The answer of A $10 000, 8.5% bond with semi-annual...

Question 14

A $100 000 bond bearing interest at 8% payable semi-annually is bought five years before maturity to yield 6% compounded annually. If the bond is redeemable at par, what is the purchase price?

Accepted Answer

The answer of A $100 000 bond bearing interest at...

Question 15

A $250 000, 6.5% bond with semi-annual coupons redeemable at par is bought 17.5 years before maturity at 78.25. What was the approximate yield rate?

Accepted Answer

The answer of A $250 000, 6.5% bond with semi-annual...

Question 16

What is the quoted price of a bond that has 4.5 years until maturity? The face value of the bond is $5000 and it has a coupon rate of 8.1% compounded semi-annually and a yield rate of 8.6% compounded semi-annually.

Accepted Answer

A) $4809.32 
B) $4998.32 
C) $4908.32 
D) $4888.32 
E) $4898.32

Question 17

A $1000 bond, with interest at 8% payable semi-annually on January 1 and July 1, was purchased on February 8, 2012. The bond matures on July 1, 2015 and yields 2.2% compounded semi-annually. What is the purchase payment for the bond?

Accepted Answer

The answer of A $1000 bond, with interest at 8%...

Question 18

A $15 000, 4.4% bond with semi-annual coupons redeemable at par on April 25, 2025, was purchased on June 25, 2016, at 93.725. What was the approximate yield rate?

Accepted Answer

A) 2.63% 
B) 5.26% 
C) 2.55% 
D) 5.10% 
E) 4.54%

Question 19

What is the purchase price of a $10 000, 3.5% bond with semi-annual coupons redeemable at 104 in seven years if the bond is bought to yield 2.5% compounded semi-annually?

Accepted Answer

The answer of What is the purchase price of a...

Question 20

A $10 000 bond bearing interest at 6% payable semi-annually redeemable at par on March 1, 2002, was purchased on September 30, 1996, to yield 5% compounded semi-annually. Determine the purchase price.

Accepted Answer

The answer of A $10 000 bond bearing interest at...

Exam 15: Bond Valuation