Question 106 Which of the following statements regarding nonrefundable bonds is most accurate? Nonrefundable bonds: A) and noncallable bonds are essentially the same. B) require approval of the bondholder to be prematurely retired. C) must be refunded from funds generated from operations, not from outside sources of capital such as new debt or equity issues. D) may only be called if the source of funds for the redemption is other than a new bond issue with a lower coupon rate. Question 107 An investor buys a 25-year, 10% annual pay bond for $900 and will sell the bond in 5 years when he estimates its yield will be 9%. The price for which the investor expects to sell this bond is closest to: A) $964. B) $1,000. C) $1,122. D) $1,091. Question 108 A bond's yield to maturity decreases from 8% to 7% and its price increases by 6%, from $675.00 to $715.50. The bond's effective duration is closest to: A) 6.0. B) 5.0. C) 7.0. D) 8.0.
Question 109 Which of the following statements least likely describes a mortgage passthrough security? A) The payment structure redistributes the prepayment risk among various investors. B) Participation certificates are sold, representing shares of a mortgage pool. C) Interest, scheduled principal amounts, and prepayments are collected and passed through to investors after deducting administrative and service fees. D) The security may be retired before maturity at face value with no penalty. Question 110 Consider four bonds that are similar in all features except those shown. The bond with the greatest reinvestment risk is: A) 5% coupon, non-callable. B) 15% coupon, callable. C) 15% coupon, non-callable. D) 5% coupon, callable.
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发表于 2008-11-6 18:17
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