Reading 6: Discounted Cash Flow Applications - LOS d, (Par

答案和详解如下：

1、A 3-month loan has a holding period yield of 1.5 percent. What is the annual yield of this loan on a bond-equivalent basis?

A)   6.65%.

B)   5.06%.

C)   6.05%.

D)   3.02%.

The correct answer was C)    

First, the 3-month yield must be converted to a semiannual yield. The result is then doubled to obtain the bond-equivalent yield.
Semiannual yield = 1.015² – 1 = 0.030225.
The bond-equivalent yield = 2 x 0.030225 = 0.06045.

2、A 1-month loan has a holding period yield of 1 percent. What is the annual yield of this loan on a bond-equivalent basis?

A)   6.15%.

B)   12.30%.

C)   12.00%.

D)   6.00%.

The correct answer was B)

First, the 1-month yield must be converted to a semiannual yield. The result is then doubled to obtain the bond-equivalent yield.
Semiannual yield = 1.01⁶ – 1 = 0.061520.
The bond-equivalent yield = 2 x 0.061520 = 0.12304.

3、The effective annual yield for an investment is 10 percent. What is the yield for this investment on a bond-equivalent basis?

A)   10.00%.

B)   9.76%.

C)   9.96%.

D)   4.88%.

The correct answer was B)

First, the annual yield must be converted to a semiannual yield. The result is then doubled to obtain the bond-equivalent yield.
Semiannual yield = 1.1^0.5 – 1 = 0.0488088.
The bond-equivalent yield = 2 x 0.0488088 = 0.097618.

4、Assume that a 1-month loan has a holding period yield of 0.80 percent. The bond equivalent yield of this loan is:

A)   9.60%.

B)   9.79%.

C)   8.00%.

D)   10.12%.

The correct answer was B)

(1+.008)⁶-1 = 4.897% 

4.897 x 2 = 9.79%.

5、If the holding period yield on a Treasury bill (T-bill) with 197 days until maturity is 1.07 percent, what is the effective annual yield?

A)   1.07%.

B)   0.58%.

C)   2.04%.

D)   1.99%.

The correct answer was D)

To calculate the EAY from the HPY, the formula is: (1 + HPY)^(365/t) – 1. Therefore, the EAY is: (1.0107)^(365/197) – 1 = 0.0199, or 1.99%.