Question 101 With market interest rates at 6%, an analyst observes a 5-year, 5% coupon, $1,000 par value callable bond selling for $950. At the same time the analyst observes a non-callable bond, identical in all other respects to the callable bond, selling for $980. The analyst should estimate that the value of the call option on the callable bond is closest to: A) $20. B) $50. C) $30. D) $80.
Question 102 If the volatility of interest rates increases, the prices of a putable bond and a callable bond will most likely: Putable bond Callable bond A) Increase Increase B) Decrease Increase C) Increase Decrease D) Decrease Decrease
Question 103 An investor is interested in buying a 4-year, $1,000 face value bond with a 7% coupon and semi-annual payments. The bond is currently priced at $875.60. The first put price is $950 in 2 years. The yield to put is closest to: A) 14.4%. B) 8.7%. C) 11.9%. D) 10.4%.
Question 104 Scott Malooly recently paid 109.05 for a $1,000 face value, semi-annual coupon bond with a quoted price of 105.19. Assuming that transaction costs are zero, which of the following statements is most accurate? A) The price Malooly paid covers the amount of the next coupon payment not earned by the seller. B) The bond was trading ex-coupon. C) Malooly purchased the bond between coupon dates. D) The price Malooly paid includes the discounted amount of accrued interest due to seller.
Question 105 Anne Warner wants to buy zero-coupon bonds in order to protect herself from reinvestment risk. She plans to hold the bonds for fifteen years and requires a rate of return of 9.5%. Fifteen-year Treasuries are currently yielding 4.5%. If interest is compounded semiannually, the price Warner is willing to pay for each $1,000 par value zero-coupon bond is closest to: A) $498. B) $256. C) $503. D) $249.
[此贴子已经被作者于2008-11-7 17:20:00编辑过] | 
发表于 2008-5-10 13:32
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