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Q7. Why do bond portfolio managers use the concept of duration?
A) It allows structuring a portfolio to take advantage of changes in credit quality.
B) It enables direct comparisons between bond issues with different levels of risk.
C) It assesses the time element of bonds in terms of both coupon and term to maturity.
Q8. Which of the following statements about duration is least accurate?
A) There is an inverse relationship between coupon and duration.
B) There is a direct relationship between yield to maturity and duration.
C) The effective duration of a zero coupon bond is equal to its maturity.
Q9. With an option-free zero-coupon bond the effective duration is:
A) unrelated to its time to maturity.
B) approximately equal to the number of semiannual periods to maturity.
C) approximately equal to its years to maturity.
Q10. Which of the following statements concerning bond duration is least accurate? Duration:
A) increases as market yields rise.
B) decreases as the coupon increases.
C) is the weighted-average maturity of the cash flows of the bond.
Q11. In December 2004, an investor purchases a zero-coupon bond issued in 1998 and maturing in December 2008. What is the bond's approximate duration?
A) 4 years.
B) 10 years.
C) Cannot be determined.
Q12. All else held equal, the duration of bonds selling at higher yields compared to bonds selling at lower yields will be:
A) cannot be determined with the information given.
B) lower.
C) greater.
Q13. For coupon-paying bonds, duration and years to maturity:
A) are unequal with duration less than years to maturity.
B) may be equal depending on the coupon rate.
C) are equal.
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发表于 2009-3-2 15:30
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