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Finance Multiple Problems




Question;1.BOnd A has a yield to maturity f 7.90%, while bond B has a YTM OF 7.60%. This difference would be described by a bond trader as;2. By examining bond prices, coupons, and maturities, it is relatively straightforward to determine______________interest rate;3. The Current yield of a bond is far more useful than jusk looking a the coupon rate, because it utilizes the_____________, instead of the ________ of bond.;4. susan has selected an appropriate bond to fill a gap in her portfolio. She has calculated the yield to maturity to be 8.3 percent, but she knows that this yield will only be realized if5. A bond investor has three possible soucers of dollars returns, these are coupon payments,capital gains or losses and;6you say with certainty that holding all factors affecting bond prices constant, the price of a ond currently trading over face will.;7. john is considering buying bonds because he expects interst raes to decline over the next 12 months. To maximimize his capital gain potential he decides to invest in a;8. When bond traders fear that interest rates are heading u, they know they can reduce their exposure to the interst rate change by holding bonds with.;9. The most accurate measure of the economic life of a bond can be found by calculating the bond's;10. Central to the concept of bond duration is the fact that duration of a bond that pays coupon interest will always be _____ the bonds maturity.;11. Consider two bonds that mature on the same date. Bond A has a shorter duration thatn bond B because Bond A has a;12. Bonds appeal to a wide variety of investors because they can offer both_______ and;13 Individual investors who wan to diversity with foreign bonds may choose a bond fund because many issues of foreign bonds do not have;14. The bond market favors the Federal Reserve pursuing a tight monetary policy because it will likely reduce the potential of bond price declines due to;15 A yield curve graphically displays the term structure of interest rates because it show interest for bonds that are identical EXCEPT FOR;16. You observe that the yield curve has a steep upward slop. The liquidity preference theory explains this shape as being the result of investors' expectations of future interest rates, combined with a/an;17. Two companies have bonds outstanding tha have identical maturites and coupon rates. The bonds of Company A are trading at a yield to maturity 100 basis points higher than the bonds of company B. THe most likely explanation for this yeield spread is that since date of issues, company A has had a changes in its:18. you have chosen a passive bond investment strategy and are building a portfolio of bonds with a variety of maturities. These types of strategies are most common among investors who prefer Not to;19 Becky has chosen to use a immunization strategy to structure her bond portfolio. Her primary reason for this decision is to offset_______, wth;20. Unders a active bond investment strategy, the investor who expects interest rates to decline will MOST LIKELY seek to generate capital gains by making what changes to his bond portfolio?


Paper#50275 | Written in 18-Jul-2015

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