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23.
Pete paid $1,032 as his total cost of purchasing a bond. This price is
referred to as the:
24.
Real rates are defined as nominal rates that have been adjusted for which
of the following?
25.
Interest rates that include an inflation premium are referred to as:
26.
The Fisher effect is defined as the relationship between which of the
following variables?
27.
The pure time value of money is known as the:
28.
Which one of the following premiums is compensation for expected future
inflation?
29.
The interest rate risk premium is the:
30.
A Treasury yield curve plots Treasury interest rates relative to which one of
the following?
31.
Which one of the following risk premiums compensates for the possibility of
nonpayment by the bond issuer?
32.
The taxability risk premium compensates bond holders for which one of the
following?
33.
The liquidity premium is compensation to investors for:
34.
An 8 percent corporate bond that pays interest semi-annually was issued
last year. Which two of the following most likely apply to this bond today if
the current yield-to-maturity is 7 percent?
I. a structure as an interest-only loan
II. a current yield that equals the coupon rate
III. a yield-to-maturity equal to the coupon rate
IV. a market price that differs from the face value
35.
A bond has a market price that exceeds its face value. Which of the
following features currently apply to this bond?
I. discounted price
II. premium price
III. yield-to-maturity that exceeds the coupon rate
IV. yield-to-maturity that is less than the coupon rate
36.
All else constant, a bond will sell at _____ when the coupon rate is _____ the
yield to maturity.
37.
The Walthers Company has a semi-annual coupon bond outstanding. An
increase in the market rate of interest will have which one of the following
effects on this bond?
38.
Which of the following are characteristics of a premium bond?
I. coupon rate < yield-to-maturity
II. coupon rate > yield-to-maturity
III. coupon rate < current yield
IV. coupon rate > current yield
39.
Which of the following relationships apply to a par value bond?
I. coupon rate < yield-to-maturity
II. current yield = yield-to-maturity
III. market price = call price
IV. market price = face value
40.
Which one of the following relationships is stated correctly?
41.
Green Roof Inns is preparing a bond offering with a 6 percent, semiannual
coupon and a face value of $1,000. The bonds will be repaid in 10 years and
will be sold at par. Given this, which one of the following statements is
correct?
42.
A newly issued bond has a 7 percent coupon with semiannual interest
payments. The bonds are currently priced at par value. The effective annual
rate provided by these bonds must be:
