Reading 68: Yield Measures, Spot Rates, and Forward Rates

答案和详解如下：

16．If a $1,000 bond has a 14 percent coupon rate and a current market price of 950, what is the current market yield?

A)   14.74%.

B)   14.00%.

C)   15.36%.

D)   16.77%.

The correct answer was A)

(0.14)(1,000) = $140 coupon

140/950 x 100 = 14.74

17．A coupon bond which pays interest $100 annually has a par value of $1,000, matures in 5 years, and is selling today at a $72 discount from par value. The yield to maturity on this bond is:

A)   7.00%.

B)   12.00%.

C)   8.33%.

D)   9.00%.

The correct answer was B)

PMT = 100
FV = 1,000
N = 5
PV = 1,000 - 72 = 928
compute I = 11.997% or 12.00%

18．Which of the following statements concerning the current yield is CORRECT? It:

A)   is of great interest to conservative bond investors seeking current income.

B)   is of great interest to aggressive bond investors seeking capital gains.

C)   shows the rate of return an investor will receive by holding a bond to maturity.

D)   can be deteremined by dividing coupon income by the face value of a bond.

The correct answer was A)

The current yield of a bond only considers interest income.  The capital gains/losses and reinvestment income are not considered.  The formula for current yield is the annual cash coupon payment divided by the bond price. 

19．The current yield on a bond is equal to:

A)   the yield to maturity.

B)   annual interest divided by the par value.

C)   annual interest divided by the current market price.

D)   the internal rate of return

The correct answer was C)

The formula for current yield is the annual cash coupon payment divided by the bond price. 

20．A coupon bond that pays interest annually is selling at par, matures in 5 years, and has a coupon rate of 12 percent. The yield to maturity on this bond is:

A)   60.00%.

B)   8.33%.

C)   6.00%.

D)   12.00%.

The correct answer was D)

N = 5
PMT = 120
PV = -1,000
FV = 1,000
Compute I = 12

Hint: the YTM equals the coupon rate when a bond is selling at par.