76) You own a bond that has a face value of $1,000 and a conversion ratio of 25. You have just
received notification that the bond is being called at a premium of $40. The stock price is $41.20
a share. You should ________ your bond because the conversion value is ________.
A) convert; less than the call price by $30.00
B) convert; greater than the call price by $10.00
C) convert; greater than the call price by $5.00
D) not convert; less than the call price by $10.00
E) not convert; greater than the call price by $30.00
77) Slater Mines just called its outstanding bonds at a call price of $1,025. The bonds have a
conversion price of $33.33 and a par value of $1,000. The stock price is currently $33.10. In
response to this call, the bondholders should ________ because ________.
A) accept the call; the call price exceeds the conversion value
B) accept the call; they have no other choice
C) convert their bonds; the conversion price exceeds the par value by $37.90
D) convert their bonds; the conversion price exceeds the call price by $12.90
E) elect to continue holding their bonds; they want to continue receiving the interest payments
78) A Treasury bond has a face value of $25,000 and a quoted price of 102:20. What is the
bond’s dollar price?
A) $25,002.80
B) $25,102.18
C) $25,656.25
D) $25,787.50
E) $31,475.00
79) A Treasury bond has a quoted bid price of 101:15 and a quoted ask price of 101:22. What is
the amount you will receive if you sell your bond that has a par value of $15,000?
A) $15,016.12
B) $15,050.45
C) $15,062.60
D) $15,100.08
E) $15,220.31
80) A Treasury bond has a yield to maturity of 5.2 percent, a time to maturity of 8 years, and a
coupon rate of 7 percent. What is the bond price?
A) $940.65
B) $946.95
C) $1,054.55
D) $1,116.59
E) $1,169.56
81) A Treasury bond has a dollar price of $1,015.63. What would you expect the bond quote to
be?
A) 101:05
B) 101:15
C) 101:16
D) 101:18
E) 101:22
82) A $1,000 Treasury note has 4.5 years left to maturity, a yield to maturity of 4.25 percent, and
a coupon rate of 4.50 percent. What is the price of the bond?
A) $1,007.83
B) $1,008.53
C) $1,009.56
D) $1,010.14
E) $1,011.96
83) A Treasury bond matures in 13 years, has a 5.25 percent coupon, and a quoted price of
98:01. What is the yield to maturity?
A) 5.25 percent
B) 5.34 percent
C) 5.46 percent
D) 5.55 percent
E) 5.68 percent
84) A Treasury bond has a 3.4 percent coupon, a quoted price of 101:06, and 9 years to maturity.
What is the yield to maturity?
A) 3.25 percent
B) 3.93 percent
C) 4.03 percent
D) 4.90 percent
E) 5.92 percent
85) A STRIPS matures in 5 years, has a face value of $15,000, and has a yield to maturity of 4.4
percent. What is the price?
A) $11,854.59
B) $12,066.53
C) $12,284.75
D) $12,322.01
E) $13,789.38
86) A STRIPS has a yield to maturity of 6.2 percent, a par value of $25,000, and a time to
maturity of 10 years. What is the price?
A) $4,100.87
B) $5,792.80
C) $9,967.50
D) $10,698.08
E) $13,575.84
87) A STRIPS has a $9,000 par value and a market value of $7,050. The time to maturity is 5
years. What is the yield to maturity?
A) 2.07 percent
B) 3.00 percent
C) 4.94 percent
D) 5.00 percent
E) 5.07 percent
88) A STRIPS that matures in 6 years is selling for $10,950. The par value is $15,000. What is
the yield to maturity?
A) 3.36 percent
B) 4.67 percent
C) 5.31 percent
D) 6.54 percent
E) 6.75 percent
89) You own a principal STRIPS which is based on a 4.5 percent coupon Treasury bond that
matures in 20 years. The STRIPS is priced at $22,868 and has a par value of $50,000. What is
the yield to maturity on the STRIPS?
A) 3.79 percent
B) 3.90 percent
C) 3.93 percent
D) 3.95 percent
E) 3.99 percent
90) The Federal Reserve is offering Treasury bills with a par value of $25 billion for sale. They
have received $7 billion of noncompetitive bids. The competitive bids for a $10,000 par value
bond are: (Qty in billions)
Bidder
Price Bid
Qty Bid
A
$
9,700
$
5.00
B
$
9,650
$
9.00
C
$
9,600
$
4.00
D
$
9,550
$
9.00
What price will Bidder A pay per bond, assuming that bid is accepted?
A) $9,600
B) $9,650
C) $9,675
D) $9,700
E) $9,750
91) The Federal Reserve is offering Treasury bills with a par value of $40 billion for sale. They
have received $18 billion of noncompetitive bids. The competitive bids for a $10,000 par value
bond are:
Bidder
Price Bid
Qty Bid (bn)
A
$
9,825
2
B
9,815
6
C
9,800
14
D
9,700
20
How much money will the Federal Reserve raise from this offering?
A) $39.05 billion
B) $39.10 billion
C) $39.20 billion
D) $39.30 billion
E) $39.50 billion