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Financial Questions test

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Question;1. A discount bond has a;yield to maturity that;exceeds the coupon rate.;equals zero.;is equal to the current yield.;is less than the coupon rate.;equals the bond's coupon rate.;1 points;Question 2;1. The rate required in the;market on a bond is called the;call yield;current yield;yield to maturity;risk premium;liquidity premium;1 points;Question 3;1. ABC has issued a bond;with the following characteristics;Par: $1,000, Time to maturity: 17 years, Coupon;rate: 4%;Assume semi-annual coupon payments. Calculate;the price of this bond if the YTM is 8.33%;Note: Enter your answer rounded off to two;decimal points. Do not enter $ or comma in the answer box. For example, if your;answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 4;1. A bond which sells for;less than the face value is called a;perpetuity.;par value bond.;debenture.;premium bond.;discount bond.;1 points;Question 5;1. You paid $908 for a;corporate bond that has a 11.77% coupon rate. What is the current yield?;Hint: if nothing is mentioned, then assume par;value = $1,000;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 6;1. Assume that you wish to;purchase a 13-year bond that has a maturity value of $1,000 and a coupon;interest rate of 4%, paid semiannually. If you require a 8.91% rate of return;on this investment (YTM), what is the maximum price that you should be willing to;pay for this bond? That is, solve for PV.;Note: Enter your answer rounded off to two;decimal points. Do not enter $ or comma in the answer box. For example, if your;answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 7;1. ABC wants to issue;8-year, zero coupon bonds that yield 6.65 percent. What price should they;charge for these bonds if they have a par value of $1,000? That is, solve for;PV. Assume annual compounding.;Hint: zero coupon bonds means PMT = 0;Note: Enter your answer rounded off to two;decimal points. Do not enter $ or comma in the answer box. For example, if your;answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 8;1. ABC has issued a bond;with the following characteristics;Par: $1,000, Time to maturity: 15 years, Coupon;rate: 4%;Assume annual coupon payments. Calculate the;price of this bond if the YTM is 9.5%;Note: Enter your answer rounded off to two;decimal points. Do not enter $ or comma in the answer box. For example, if your;answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 9;1. ABC's bonds have a 9.5;percent coupon and pay interest semi-annually. Currently, the bonds are quoted;at 106.315 percent of par value. The bonds mature in 8 years. What is the yield;to maturity?;1 points;Question 10;1. The 8 percent coupon;bonds of the Peterson Co. are selling for 98 percent of par value. The bonds;mature in 5 years and pay interest semi-annually. These bonds have a yield to;maturity of _____ percent.;1 points;Question 11;1. ABC's Inc.'s bonds;currently sell for $1,280 and have a par value of $1,000. They pay a $135;annual coupon and have a 15-year maturity, but they can be called in 5 years at;$1,050. What is their yield to call (YTC)?;Note: Enter your answer;rounded off to two decimal points. Do not enter % in the answer box. For;example, if your answer is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 12;1. The 10.57 percent coupon;bonds of the Peterson Co. are selling for $884.85. The bonds mature in 5 years;and pay interest semi-annually. These bonds have current yield of;percent.;Enter your answer in percentages rounded off to;two decimal points.;1 points;Question 13;1. The 11.34 percent;$1,000 face value bonds of Tim McKnight, Inc., are currently selling at;$986.98. What is the current yield?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 14;1. A premium bond is a bond;that;is callable within 12 months or less.;has a market price which exceeds the face value.;is selling for less than par value.;has a face value in excess of $1,000.;has a par value which exceeds the face value.;1 points;Question 15;1. ABC Inc., has $1,000;face value bonds outstanding. These bonds mature in 3 years, and have a 6.5;percent coupon. The current price is quoted at 98.59 percent of par value.;Assume semi-annual payments. What is the yield to maturity?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 16;1. A firm's bonds have;maturity of 10 years with a $1000 face value, an 8% semi-annual coupon, are;callable in 5 years, at $1,050, and currently sells at a price of $1,100. What;is the yield to call (YTC)?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 17;1. The principal amount of;a bond that is repaid at the end of term is called the par value or the;back-end amount;coupon;face value;discount amount;coupon rate;1 points;Question 18;1. Stealers Wheel Software;has 5.94% coupon bonds on the market with nine years to maturity. The bonds;make semi-annual payments and currently sell for 90% of par. What is the;current yield?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 19;1. BCD?s $1,000 par value;bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually.;If the bonds have 5 years to maturity, what is the yield to maturity?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Question 20;1. The yield to maturity on;a Marshall Co. premium bond is 7.6 percent. This is the;nominal rate.;effective rate.;real rate.;current yield.;coupon rate.;1 points;Question 21;1. ABC has issued a bond;with the following characteristics;Par: $1,000, Time to maturity: 19 years, Coupon;rate: 5%;Assume semi-annual coupon payments. Calculate;the price of this bond if the YTM is 5.16%;Note: Enter your answer rounded off to two;decimal points. Do not enter $ or comma in the answer box. For example, if your;answer is $12.345 then enter as 12.35 in the answer box.;1 points;Question 22;1. ABC Corp. issued 15-year;bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual;payments. If these bonds currently sell for 97% of par value, what is the YTM?;Note: Enter your answer rounded off to two;decimal points. Do not enter % in the answer box. For example, if your answer;is 0.12345 then enter as 12.35 in the answer box.;1 points;Save;and Submit;Click Save and Submit to save and submit. Click Save All Answers;to save all answers.;Bottom of Form

 

Paper#49081 | Written in 18-Jul-2015

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