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LOS b, (Part 1): Describe the basic features of a bond.
Q1. Which one of the following alternatives represents the correct series of payments made by a typical 6% U.S. Treasury note with a par value of $100,000 issued today with five years to maturity?
Number and size of each intermediate payment Payment made at maturity
A) 4 annual payments of $6,000 $106,000
B) 9 semiannual payments of $3,000 $103,000
C) 9 semiannual payments of $3,000 $100,000
Q2. A bond has a par value of $5,000 and a coupon rate of 8.5% payable semi-annually. The bond is currently trading at 112.16. What is the dollar amount of the semi-annual coupon payment?
A) $212.50.
B) $238.33.
C) $425.00.
Q3. Which one of the following combinations represents an accurate classification of security owner options and security issuer options?
Security Owner Options Security Issuer Options
A) A call provision A prepayment option
B) A cap An accelerated sinking fund
C) A floor A prepayment option
Q4. A bond issued by the government of Italy is likely to be denominated in which one of the following currencies?
A) U.S. dollars.
B) Euros.
C) Swiss francs.
Q5. Interest rates have fallen over the seven years since a $1,000 par, 10-year bond was issued with a coupon of 7%. What is the present value of this bond if the required rate of return is currently four and one-half percent? (For simplicity, assume annual payments.)
A) $1,068.72
B) $1,052.17.
C) $1,044.33.
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发表于 2009-3-2 14:56
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