Bond Prices And Yields

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Question 1

Free

Multiple Choice

Which one of the following is the correct definition of a coupon rate?

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semi-annual interest payment/par value

annual interest/par value

annual interest/market value

semi-annual coupon/bond price

annual coupon/bond price

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Question 2

Free

Multiple Choice

What is the annual interest divided by the market price of a bond called?

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coupon rate

effective annual yield

current yield

yield to maturity

yield to market

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Question 3

Free

Multiple Choice

The yield to maturity is the:

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discount rate that equates a bond's price with the present value of the bond's future cash flows.

rate you will earn if your bond is called on the earliest possible date.

rate computed by dividing the annual interest by the par value.

rate used to compute the amount of each interest payment.

rate computed as the annual interest divided by the market value.

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Question 4

Free

Multiple Choice

A premium bond is defined as a bond that:

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has a duration that is less than 1.0.

has a face value that exceeds its market value.

is callable at a price which exceeds the face value.

has a market price that exceeds par value.

is selling for less than face value.

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Question 5

Free

Multiple Choice

A discount bond:

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pays a variable coupon payment.

has a market price in excess of face value.

has a duration that is less than that required by an investor.

has a par value that is less than $1,000.

has a face value that exceeds the market value.

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Question 6

Multiple Choice

The price of a bond,net of accrued interest,is referred to as the bond's:

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dirty price.

par value.

clean price.

maturity value.

discount value.

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Question 7

Multiple Choice

The dirty price of a bond is the:

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invoice price.

quoted price.

issue price.

average of the bid and asked prices.

dealer purchase price.

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Question 8

Multiple Choice

A callable bond:

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can be paid off early at either the issuer's or the bondholder's request.

can be redeemed early if the bondholder so requests.

can have its maturity date extended by the issuer.

can be redeemed by the issuer prior to maturity.

is a bond that pays a variable interest payment.

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Question 9

Multiple Choice

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

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par value

face value

put price

call price

discounted price

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Question 10

Multiple Choice

Which one of the following prices is equal to the present value of a bond's future cash flows and is paid when a bond is redeemed prior to maturity?

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call protected

face value

make-whole call

tender-offer

deferred

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Question 11

Multiple Choice

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?

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make-whole provision

call protection period

newly issued provision

put provision

call premium

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Question 12

Multiple Choice

The yield that a bond will earn given that it is bought back by the issuer at the earliest possible date is the:

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market yield.

current yield.

yield to maturity.

yield to put.

yield to call.

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Question 13

Multiple Choice

Which one of the following is the risk that market interest rates may increase causing the price of a bond to decline?

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inflation risk

reinvestment risk

yield risk

interest rate risk

default risk

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Question 14

Multiple Choice

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

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market return

realized yield

annualized coupon yield

maturity yield

call yield

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Question 15

Multiple Choice

Which one of the following measures a bond's sensitivity to changes in market interest rates?

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yield to call

yield to market

duration

immunization

target date valuation

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Question 16

Multiple Choice

A change in a bond's price caused by which one of the following is defined as the dollar value of an 01?

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change in yield to call due to passage of one year

change in yield to maturity of one percent

change in yield to maturity of one basis point

change in coupon rate of one percent

change in coupon rate of one basis point

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Question 17

Multiple Choice

The yield value of a 32^nd is the change needed in which one of the following to cause a bond's price to change by 1/32^nd?

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current yield

yield to maturity

coupon rate

call premium

call date

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Question 18

Multiple Choice

A dedicated portfolio is a bond portfolio created to:

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maximize current interest income.

provide an increasing steady stream of income.

maximize the return given declining interest rates.

fund a future cash outlay.

avoid taxation.

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Question 19

Multiple Choice

Which one of the following risks is associated with investing a coupon payment at a rate that is lower than the bond's yield-to-maturity?

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reinvestment rate risk

current rate risk

payment risk

current yield risk

maturity risk

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Question 20

Multiple Choice

Which one of the following involves creating a portfolio in a manner which minimizes the uncertainty of the portfolio's maturity target date value?

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duration

reinvestment

immunization

modification

call protection

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Bond Prices And Yields

Which one of the following is the correct definition of a coupon rate?

What is the annual interest divided by the market price of a bond called?

The yield to maturity is the:

A premium bond is defined as a bond that:

A discount bond:

The price of a bond,net of accrued interest,is referred to as the bond's:

The dirty price of a bond is the:

A callable bond:

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

Which one of the following prices is equal to the present value of a bond's future cash flows and is paid when a bond is redeemed prior to maturity?

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 yield that a bond will earn given that it is bought back by the issuer at the earliest possible date is the:

Which one of the following is the risk that market interest rates may increase causing the price of a bond to decline?

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

Which one of the following measures a bond's sensitivity to changes in market interest rates?

A change in a bond's price caused by which one of the following is defined as the dollar value of an 01?

The yield value of a 32nd is the change needed in which one of the following to cause a bond's price to change by 1/32nd?

A dedicated portfolio is a bond portfolio created to:

Which one of the following risks is associated with investing a coupon payment at a rate that is lower than the bond's yield-to-maturity?

Which one of the following involves creating a portfolio in a manner which minimizes the uncertainty of the portfolio's maturity target date value?

The yield value of a 32^nd is the change needed in which one of the following to cause a bond's price to change by 1/32^nd?