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Question 23 1 pts A corporate bond has an expected, total (not excess) return of 5%....
A corporate bond has an expected, total (not excess) return of 5%. The risk-free rate is...
A corporate bond has an expected, total (not excess) return of 5%. The risk-free rate is 2% and the expected market return (total, not excess) is 10%. Which of the following is closest to the beta of the corporate bond?
A coupon bond which pays interest of $60 annually, has a par value of $1,000, matures...
A coupon bond which pays interest of $60 annually, has a par value of $1,000, matures in 5 years, and is selling today at a 584.52 discount from par value. The approximate yield to maturity on this bond is A6% B. 7% C. 8% D. 9% For a discount bond, its coupon rate is_than its yield to maturity and its price is expected to ___over the years. A B. C. D. Greater; increase Greater; decrease Lower; increase Lower; decrease A...
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon...
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price.of S1.050. The price or the bond today is $1,075 A. (8 pts) What is the bond's nominal yield to maturity? B. (8 pts)What is the bond's nominal yield to call? C. (2pts) If you bought this bond, which return do vou think you would actually earn? D....
You are considering purchasing a corporate bond that has an expected rate of return of 10%,...
You are considering purchasing a corporate bond that has an expected rate of return of 10%, 5% coupon paid annually, a 1,000 par value, and has 3 years to maturity. Based on your projections, you will be able to sell the bond at the end of year 3 for 1,100. Calculate current market price of the bond.
2. A bond matures in 7 years, has a par value of $1,000, and an annual...
2. A bond matures in 7 years, has a par value of $1,000, and an annual coupon payment of $70. Investors require a return of 8.5%. Calculate the price of the bond. [8 points] 3. A bond is priced at $1,280, has a par value of $1,000, 15 years to maturity, and a $135 annual coupon. The bond is callable in 5 years at $1,050. Calculate the yield to call. [8 points] 4. If 10-year Treasury bonds yield 6.2%, 10-year...
QUESTION 1 Match the terms correctly - Putable Bond A Investors can exchange the bond for...
QUESTION 1 Match the terms correctly - Putable Bond A Investors can exchange the bond for a set number of shares of common stock of the issuer. - Secured Bond ..Callable Bond . . Convertible Bond - Debenture B. Specific assets of the firm are designated as collateral for the bond. C. Investors can force the issuerto repurchase the bond at a price that is pre- specified in the bond indenture. D. A bond that does not have specific assets...
1. Bond yields Aa Aa E Coupon payments are fixed, but the percentage return that investors...
1. Bond yields Aa Aa E Coupon payments are fixed, but the percentage return that investors receive varies based on market conditions. This percentage return is referred to as the bond's yield. Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. However, the YTM equals the expected rate of return under certain assumptions. Which of the following is one of those assumptions? The bond is callable. The probability of default is...
5. Bond yields Coupon payments are fixed, but the percentage return that investors receive varies based...
5. Bond yields Coupon payments are fixed, but the percentage return that investors receive varies based on market conditions. This percentage return is referred to as the bond's yield. Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. However, the YTM equals the expected rate of return under certain assumptions. Which of the following is one of those assumptions? The bond will not be called. The bond has an early redemption...
1. Which of the following bonds has the lowest interest rate risk? A. 3-year 5% corporate...
1. Which of the following bonds has the lowest interest rate risk? A. 3-year 5% corporate bond. B. 30-year 5% corporate bond. C. 30-year zero-coupon corporate bond. 2. If the effective duration of a callable bond is 5 and the negative convexity adjustment is 1%. If yield were to fall by 100 basis point, the duration combined with convexity would: A. Produce a price change of 5% B. Produce a price change of less than 5%. C. Produce a price...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B)...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
A coupon bond which pays interest of $60 annually, has a par value of $1,000, matures in 5 years, and is selling today at a 584.52 discount from par value. The approximate yield to maturity on this bond is A6% B. 7% C. 8% D. 9% For a discount bond, its coupon rate is_than its yield to maturity and its price is expected to ___over the years. A B. C. D. Greater; increase Greater; decrease Lower; increase Lower; decrease A...
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price.of S1.050. The price or the bond today is $1,075 A. (8 pts) What is the bond's nominal yield to maturity? B. (8 pts)What is the bond's nominal yield to call? C. (2pts) If you bought this bond, which return do vou think you would actually earn? D....
2. A bond matures in 7 years, has a par value of $1,000, and an annual coupon payment of $70. Investors require a return of 8.5%. Calculate the price of the bond. [8 points] 3. A bond is priced at $1,280, has a par value of $1,000, 15 years to maturity, and a $135 annual coupon. The bond is callable in 5 years at $1,050. Calculate the yield to call. [8 points] 4. If 10-year Treasury bonds yield 6.2%, 10-year...
QUESTION 1 Match the terms correctly - Putable Bond A Investors can exchange the bond for a set number of shares of common stock of the issuer. - Secured Bond ..Callable Bond . . Convertible Bond - Debenture B. Specific assets of the firm are designated as collateral for the bond. C. Investors can force the issuerto repurchase the bond at a price that is pre- specified in the bond indenture. D. A bond that does not have specific assets...
1. Bond yields Aa Aa E Coupon payments are fixed, but the percentage return that investors receive varies based on market conditions. This percentage return is referred to as the bond's yield. Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. However, the YTM equals the expected rate of return under certain assumptions. Which of the following is one of those assumptions? The bond is callable. The probability of default is...
5. Bond yields Coupon payments are fixed, but the percentage return that investors receive varies based on market conditions. This percentage return is referred to as the bond's yield. Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. However, the YTM equals the expected rate of return under certain assumptions. Which of the following is one of those assumptions? The bond will not be called. The bond has an early redemption...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
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