Interest Rates And Bond Valuation

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Introduction to Corporate Finance
Financial Statements,Taxes,and Cash Flow
Working With Financial Statements
Long-Term Financial Planning and Growth
Introduction to Valuation: The Time Value of Money
Discounted Cash Flow Valuation
Interest Rates and Bond Valuation
Stock Valuation
Net Present Value and Other Investment Criteria
Making Capital Investment Decisions
Project Analysis and Evaluation
Some Lessons From Capital Market History
Return,Risk,and the Security Market Line
Cost of Capital
Raising Capital
Financial Leverage and Capital Structure Policy
Dividends and Payout Policy
Short-Term Finance and Planning
Cash and Liquidity Management
Credit and Inventory Management
International Corporate Finance
Behavioral Finance: Implications for Financial Management
Enterprise Risk Management
Options and Corporate Finance
Option Valuation
Mergers and Acquisitions
Leasing

All Questions

Question 1

Free

Multiple Choice

Mary just purchased a bond which pays $60 a year in interest.What is this $60 called?

Choose correct answer/s

coupon

face value

discount

call premium

yield

Check answer

Question 2

Free

Multiple Choice

Bert owns a bond that will pay him $75 each year in interest plus a $1,000 principal payment at maturity.What is the $1,000 called?

Choose correct answer/s

coupon

face value

discount

yield

dirty price

Check answer

Question 3

Free

Multiple Choice

A bond's coupon rate is equal to the annual interest divided by which one of the following?

Choose correct answer/s

call price

current price

face value

clean price

dirty price

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Question 4

Free

Multiple Choice

The specified date on which the principal amount of a bond is payable is referred to as which one of the following?

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coupon date

yield date

maturity

dirty date

clean date

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Question 5

Free

Multiple Choice

Currently,the bond market requires a return of 11.6 percent on the 10-year bonds issued by Winston Industries.The 11.6 percent is referred to as which one of the following?

Choose correct answer/s

coupon rate

face rate

call rate

yield to maturity

interest rate

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Question 6

Multiple Choice

The current yield is defined as the annual interest on a bond divided by which one of the following?

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coupon

face value

market price

call price

dirty price

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Question 7

Multiple Choice

An indenture is:

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another name for a bond's coupon.

the written record of all the holders of a bond issue.

a bond that is past its maturity date but has yet to be repaid.

a bond that is secured by the inventory held by the bond's issuer.

the legal agreement between the bond issuer and the bondholders.

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Question 8

Multiple Choice

Atlas Entertainment has 15-year bonds outstanding.The interest payments on these bonds are sent directly to each of the individual bondholders.These direct payments are a clear indication that the bonds can accurately be defined as being issued:

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at par.

in registered form.

in street form.

as debentures.

as callable.

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Question 9

Multiple Choice

A bond that is payable to whomever has physical possession of the bond is said to be in:

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new-issue condition.

registered form.

bearer form.

debenture status.

collateral status.

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Question 10

Multiple Choice

The Leeward Company just issued 15-year,8 percent,unsecured bonds at par.These bonds fit the definition of which one of the following terms?

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note

discounted

zero-coupon

callable

debenture

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Question 11

Multiple Choice

Which of the following defines a note?
I)secured
II)unsecured
III)maturity less than 10 years
IV)maturity in excess of 10 years

Choose correct answer/s

III only

I and III only

I and IV only

II and III only

II and IV only

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Question 12

Multiple Choice

A sinking fund is managed by a trustee for which one of the following purposes?

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paying interest payments

early bond redemption

converting bonds into equity securities

paying preferred dividends

reducing coupon rates

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Question 13

Multiple Choice

A bond that can be paid off early at the issuer's discretion is referred to as being which one of the following?

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zero coupon

callable

senior

collateralized

unsecured

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Question 14

Multiple Choice

A $1,000 face value bond can be redeemed early at the issuer's discretion for $1,030,plus any accrued interest.The additional $30 is called which one of the following?

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dirty price

redemption value

call premium

original-issue discount

redemption discount

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Question 15

Multiple Choice

A deferred call provision is which one of the following?

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requirement that a bond issuer pay the current market price, plus accrued interest, should the firm decide to call a bond

ability of a bond issuer to delay repaying a bond until after the maturity date should the issuer so opt

prohibition placed on an issuer which prevents that issuer from ever redeeming bonds prior to maturity

prohibition which prevents bond issuers from redeeming callable bonds prior to a specified date

requirement that a bond issuer pay a call premium which is equal to or greater than one year's coupon should that issuer decide to call a bond

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Question 16

Multiple Choice

A call-protected bond is a bond that:

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is guaranteed to be called.

can never be called.

is currently being called.

is callable at any time.

cannot be called during a certain period of time.

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Question 17

Multiple Choice

The items included in an indenture that limit certain actions of the issuer in order to protect bondholder's interests are referred to as the:

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trustee relationships.

bylaws.

legal bounds.

"plain vanilla" conditions.

protective covenants.

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Question 18

Multiple Choice

A bond that has only one payment,which occurs at maturity,defines which one of the following?

Choose correct answer/s

debenture

callable

floating-rate

junk

zero coupon

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Question 19

Multiple Choice

Which one of the following is the price a dealer will pay to purchase a bond?

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call price

asked price

bid price

bid-ask spread

par value

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Question 20

Multiple Choice

You want to buy a bond from a dealer.Which one of the following prices will you pay?

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call price

auction price

bid price

asked price

bid-ask spread

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Interest Rates And Bond Valuation

Mary just purchased a bond which pays $60 a year in interest.What is this $60 called?

Bert owns a bond that will pay him $75 each year in interest plus a $1,000 principal payment at maturity.What is the $1,000 called?

A bond's coupon rate is equal to the annual interest divided by which one of the following?

The specified date on which the principal amount of a bond is payable is referred to as which one of the following?

Currently,the bond market requires a return of 11.6 percent on the 10-year bonds issued by Winston Industries.The 11.6 percent is referred to as which one of the following?

The current yield is defined as the annual interest on a bond divided by which one of the following?

An indenture is:

Atlas Entertainment has 15-year bonds outstanding.The interest payments on these bonds are sent directly to each of the individual bondholders.These direct payments are a clear indication that the bonds can accurately be defined as being issued:

A bond that is payable to whomever has physical possession of the bond is said to be in:

The Leeward Company just issued 15-year,8 percent,unsecured bonds at par.These bonds fit the definition of which one of the following terms?

Which of the following defines a note?I)securedII)unsecuredIII)maturity less than 10 yearsIV)maturity in excess of 10 years

A sinking fund is managed by a trustee for which one of the following purposes?

A bond that can be paid off early at the issuer's discretion is referred to as being which one of the following?

A $1,000 face value bond can be redeemed early at the issuer's discretion for $1,030,plus any accrued interest.The additional $30 is called which one of the following?

A deferred call provision is which one of the following?

A call-protected bond is a bond that:

The items included in an indenture that limit certain actions of the issuer in order to protect bondholder's interests are referred to as the:

A bond that has only one payment,which occurs at maturity,defines which one of the following?

Which one of the following is the price a dealer will pay to purchase a bond?

You want to buy a bond from a dealer.Which one of the following prices will you pay?

Which of the following defines a note?
I)secured
II)unsecured
III)maturity less than 10 years
IV)maturity in excess of 10 years