Chapter 10 Bond Prices and Yields - This area is password ：10章债券价格和收益率这个地区是密码

1、Chapter 10 - Bond Prices and YieldsChapter 10Bond Prices and Yields  Multiple Choice Questions 1. The invoice price of a bond is the _. A. stated or flat price in a quote sheet plus accrued interestB. stated or flat price in a quote sheet minus accrued interestC. b

2、id priceD. average of the bid and ask price 2. Sinking funds are commonly viewed as protecting the _ of the bond. A. issuerB. underwriterC. holderD. dealer 3. A collateral trust bond is _. A. secured by other securities held by the firmB.&#

3、160;secured by equipment owned by the firmC. secured by property owned by the firmD. unsecured 4. A mortgage bond is _. A. secured by other securities held by the firmB. secured by equipment owned by the firmC. secured by property owned by the firmD. unse

4、cured 5. A debenture is _. A. secured by other securities held by the firmB. secured by equipment owned by the firmC. secured by property owned by the firmD. unsecured 6. Bonds issued in the U.S. are _ and most bonds issued overseas are _. A. be

5、arer bonds; registered bondsB. registered bonds; bearer bondsC. straight bonds; convertible bondsD. puttable bonds; callable 7. Floating rate bonds have a _ that is adjusted with current market interest rates. A. maturity dateB. coupon payment dateC. coup

6、on rateD. dividend yield 8. Inflation-indexed Treasury securities are commonly called _. A. PIKsB. CARsC. TIPSD. STRIPS 9. When discussing bonds, convexity relates to the _. A. shape of the bond price curve with respect to interest ratesB.&

7、#160;shape of the yield curve with respect to maturityC. slope of the yield curve with respect to liquidity premiumsD. size of the bid-ask spread 10. A Japanese firm issued and sold a pound denominated bond in the United Kingdom. A U.S. firm issued bonds denominated in dollars bu

8、t sold the bonds in Japan. Which one of the following statements is correct? A. Both bonds are examples of Eurobonds.B. The Japanese bond is a Eurobond and the U.S. bond is termed a foreign bond.C. The U.S. bond is a Eurobond and the Japanese bond is termed a foreign bond.D. 

9、;Neither bond is a Eurobond. 11. The primary difference between Treasury notes and bonds is _. A. maturity at issueB. default riskC. coupon rateD. tax status 12. TIPS offer investors inflation protection by _ by the inflation rate each year. A. 

10、increasing only the coupon rateB. increasing only the par valueC. increasing both the par value and the coupon paymentD. increasing the promised yield to maturity 13. You would typically find all but which one of the following in a bond contract? A. A dividend rest

11、riction clauseB. A sinking fund clauseC. A requirement to subordinate any new debt issuedD. A price-earnings ratio 14. To earn a high rating from the bond rating agencies, a company would want to have _.I. a low times interest earned ratioII. a low debt to equity ratioIII. a

12、 high quick ratio A. I onlyB. II and III onlyC. I and III onlyD. I, II and III 15. According to the liquidity preference theory of the term structure of interest rates an increase in the yield on long term corporate bonds versus short term bonds could be due to _.&

13、#160;A. declining liquidity premiumsB. expectation of an upcoming recessionC. a decline in future inflation expectationsD. increase in expected interest rate volatility 16. _ are examples of synthetically created zero coupon bonds. A. COLTSB. OPOSSMSC.

14、60;STRIPSD. ARMs 17. A _ bond is a bond where the bondholder has the right to cash in the bond before maturity at a specific price after a specific date. A. callableB. couponC. puttableD. treasury 18. TIPS are an example of _. A. EurobondsB

15、. convertible bondsC. indexed bondsD. catastrophe bonds 19. Bonds issued in the currency of the issuer's country but sold in other national markets are called _. A. EurobondsB. Yankee bondsC. Samurai bondsD. foreign bonds 20. You buy a

16、TIPS at issue at par for $1,000. The bond has a 3% coupon. Inflation turns out to be 2%, 3% and 4% over the next three years. The total annual coupon income you will receive in year three is _. A. $30.00B. $33.00C. $32.78D. $30.90 21. The bonds of Elbow Grease Dish

17、washing Company have received a rating of "C" by Moody's. The "C" rating indicates the bonds are _. A. high gradeB. intermediate gradeC. investment gradeD. junk bonds 22. Bonds rated _ or better by Standard and Poor's are considered inve

18、stment grade. A. AAB. BBBC. BBD. CCC 23. Consider the liquidity preference theory of the term structure of interest rates. On average, one would expect investors to require _. A. a higher yield on short term bonds than long term bondsB. a higher yiel

19、d on long term bonds than short term bondsC. the same yield on both short term bonds and long term bondsD. the liquidity preference theory cannot be used to make any of the other statements. 24. Consider two bonds, A and B. Both bonds presently are selling at their par value of $

20、1,000. Each pay interest of $120 annually. Bond A will mature in 5 years while bond B will mature in 6 years. If the yields to maturity on the two bonds change from 12% to 14%, _. A. both bonds will increase in value but bond A will increase more than bond BB. both bonds will increase

21、 in value but bond B will increase more than bond AC. both bonds will decrease in value but bond A will decrease more than bond BD. both bonds will decrease in value but bond B will decrease more than bond A 25. Everything else equal _ bonds will require a higher promised YTM tha

22、n _ bonds. A. catastrophe; standardB. non-callable; callableC. mortgage; debentureD. AAA rated; BAA rated 26. Bonds with coupon rates that fall when the general level of interest rates rise are called _. A. asset-backed bondsB. convertible bondsC.

23、60;inverse floatersD. index bonds 27. _ bonds represent a novel way of obtaining insurance from capital markets against specified disasters. A. Asset backed bondsB. TIPSC. CatastropheD. Pay in Kind 28. The issuer of a/an _ bond may choose to pay inte

24、rest either in cash or in additional bonds. A. asset backed bondsB. TIPSC. catastropheD. pay in kind 29. Everything else equal the _ the maturity of a bond and the _ the coupon the greater the sensitivity of the bond's price to interest rate changes. A.

25、60;longer; higherB. longer; lowerC. shorter; higherD. shorter; lower 30. Which one of the following statements is correct? A. Invoice price = Flat price - Accrued InterestB. Invoice price = Flat price + Accrued InterestC. Flat price = Invoice price + Accr

26、ued InterestD. Invoice price = Settlement price - Accrued Interest 31. A _ bond is a bond where the issuer has an option to retire the bond before maturity at a specific price after a specific date. A. callableB. couponC. puttableD. treasury 32. Whic

27、h of the following possible provisions of a bond indenture is designed to ease the burden of principal repayment by spreading it out over several years? A. Callable featureB. Convertible featureC. Subordination clauseD. Sinking fund 33. Serial bonds are associated

28、with _. A. staggered maturity datesB. collateralC. coupon payment datesD. conversion features 34. In an era of particularly low interest rates, which of the following bonds is most likely to be called? A. Zero coupon bondsB. Coupon bonds selling at a

29、 discountC. Coupon bonds selling at a premiumD. Floating rate bonds 35. Consider the expectations theory of the term structure of interest rates. If the yield curve is downward sloping, this indicates that investors expect short-term interest rates to _ in the future. A.

30、0;increaseB. decreaseC. not changeD. change in an unpredictable manner 36. A convertible bond has a par value of $1,000 but its current market price is $975. The current price of the issuing company's stock is $26 and the conversion ratio is 34 shares. The bond's mar

31、ket conversion value is _. A. $1,000B. $884C. $933D. $980 37. A convertible bond has a par value of $1,000 but its current market price is $950. The current price of the issuing company's stock is $19 and the conversion ratio is 40 shares. The bond's conver

32、sion premium is _. A. $50.00B. $190.00C. $200.00D. $240.00 38. A coupon bond which pays interest of 4% annually, has a par value of $1,000, matures in 5 years, and is selling today at $785. The actual yield to maturity on this bond is _. A. 7.2%B. 8.

33、8%C. 9.1%D. 9.6% 39. 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 $84.52 discount from par value. The approximate yield to maturity on this bond is _. A. 6%B. 7%C. 8%D. 9% 

34、;40. 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 $75.25 discount from par value. The current yield on this bond is _. A. 6.00%B. 6.49%C. 6.73%D. 7.00% 41. A callable bond pays annu

35、al interest of $60, has a par value of $1,000, matures in 20 years but is callable in 10 years at a price of $1,100, and has a value today of $1055.84. The yield to call on this bond is _. A. 6.00%B. 6.58%C. 7.20%D. 8.00% 42. A coupon bond which pays interest semi-

36、annually has a par value of $1,000, matures in 8 years, and has a yield to maturity of 6%. If the coupon rate is 7%, the intrinsic value of the bond today will be _ (to the nearest dollar). A. $1,000B. $1,063C. $1,081D. $1,100 43. A coupon bond which pays interest

37、annually, has a par value of $1,000, matures in 5 years and has a yield to maturity of 12%. If the coupon rate is 9%, the intrinsic value of the bond today will be approximately _. A. $856B. $892C. $926D. $1,000 44. A coupon bond pays semi-annual interest is report

38、ed as having an ask price of 117% of its $1,000 par value in the Wall Street Journal. If the last interest payment was made 2 months ago and the coupon rate is 6%, the invoice price of the bond will be _. A. $1,140B. $1,170C. $1,180D. $1,200 45. A treasury bond due

39、 in one year has a yield of 6.3% while a treasury bond due in 5 years has a yield of 8.8%. A bond due in 5 years issued by High Country Marketing Corporation has a yield of 9.6% while a bond due in one year issued by High Country Marketing Corporation has a yield of 6.8%. The default risk premiums o

40、n the one-year and 5-year bonds issued by High Country Marketing Corp. are respectively _ and _. A. 0.4%, 0.3%B. 0.4%, 0.5%C. 0.5%, 0.5%D. 0.5%, 0.8% 46. A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000. If the bond matures in 16 years, it

41、 should sell for a price of _ today. A. $458.00B. $641.00C. $789.00D. $1,100.00 47. Yields on municipal bonds are typically _ yields on corporate bonds of similar risk and time to maturity. A. lower thanB. slightly higher thanC. identical toD.&#

42、160;twice as high as 48. You purchased a 5-year annual interest coupon bond one year ago. Its coupon interest rate was 6% and its par value was $1,000. At the time you purchased the bond, the yield to maturity was 4%. If you sold the bond after receiving the first interest payment and the

43、bond's yield to maturity had changed to 3%, your annual total rate of return on holding the bond for that year would have been approximately _. A. 5.0%B. 5.5%C. 7.6%D. 8.9% 49. Analysis of bond returns over a multiyear horizon based on forecasts of the bond'

44、;s yield to maturity and reinvestment rate of coupons is called _. A. multiyear analysisB. horizon analysisC. maturity analysisD. reinvestment analysis  $1,000 par value zero coupon bonds, ignore liquidity premiums   50. The expected one-year in

45、terest rate one year from now should be about _. A. 6.00%B. 7.50 %C. 9.00%D. 10.00% 51. One year from now Bond C should sell for _ (to the nearest dollar). A. $857B. $842C. $835D. $821 52. The expected two year interest rate three

46、 years from now should be _. A. 9.55%B. 11.74%C. 14.89%D. 13.73% 53. The _ of a bond is computed as the ratio of coupon payments to market price. A. nominal yieldB. current yieldC. yield to maturityD. yield to call 54. A bond has

47、a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually. If the current market price is $750, what is the approximate capital gain yield of this bond over the next year? A. 0.7%B. 1.8%C. 2.5%D. 3.4% 55. Consider th

48、e following $1,000 par value zero-coupon bonds:  The expected one-year interest rate two years from now should be _. A. 7.00%B. 8.00%C. 9.00%D. 10.00% 56. Which of the following bonds would most likely sell at the lowest yield? A. A callable deb

49、entureB. A putable mortgage bondC. A callable mortgage bondD. A putable debenture 57. A 1% decline in yield will have the least effect on the price of the bond with a _. A. 10-year maturity, selling at 80B. 10-year maturity, selling at 100C. 20-year matur

50、ity, selling at 80D. 20-year maturity, selling at 100 58. Consider the following $1,000 par value zero-coupon bonds:  The expected one-year interest rate three years from now should be _. A. 7.00%B. 8.00%C. 9.00%D. 10.00% 59. Consider the f

51、ollowing $1,000 par value zero-coupon bonds:  The expected one-year interest rate four years from now should be _. A. 16.00%B. 18.00%C. 20.00%D. 22.00% 60. You can be sure that a bond will sell at a premium to par when _. A. its coupon rate is g

52、reater than its yield to maturityB. its coupon rate is less than its yield to maturityC. its coupon rate equal to its yield to maturityD. its coupon rate is less than its conversion value 61. A corporate bond has a 10 year maturity and pays interest semiannually. The quoted

53、coupon rate is 6% and the bond is priced at par. The bond is callable in 3 years at 110% of par. What is the bond's yield to call? A. 6.72%B. 9.17%C. 4.49%D. 8.98% 62. Consider a 7-year bond with a 9% coupon and a yield to maturity of 12%. If interest rates rem

54、ain constant, one year from now the price of this bond will be _. A. higherB. lowerC. the sameD. indeterminate 63. Under the pure expectations hypothesis and constant real interest rates for different maturities, an upward sloping yield curve would indicate _. 

55、;A. expected increases in inflation over timeB. expected decreases in inflation over timeC. the presence of a liquidity premiumD. that the equilibrium interest rate in the short term part of the market is lower than the equilibrium interest rate in the long-term part of the marke

56、t 64. The yield to maturity on a bond is _.I. above the coupon rate when the bond sells at a discount, and below the coupon rate when the bond sells at a premiumII. the discount rate that will set the present value of the payments equal to the bond priceIII. equal to the true compound retu

57、rn on investment only if all interest payments received are reinvested at the yield to maturity A. I onlyB. II onlyC. I and II onlyD. I, II and III 65. Yields on municipal bonds are generally lower than yields on similar corporate bonds because of differences in _.

58、 A. marketabilityB. riskC. taxationD. call protection 66. Assuming semiannual compounding, a 20-year zero coupon bond with a par value of $1,000 and a required return of 12% would be priced at _. A. $97B. $104C. $364D. $732 67. A

59、discount bond that pays interest semiannually will _.I. have a lower price than an equivalent annual payment bondII. have a higher EAR than an equivalent annual payment bondIII. sell for less than its conversion value A. I and II onlyB. I and III onlyC. II and III onlyD. I,

60、II and III 68. A 6% coupon U.S. treasury note pays interest on May 31 and November 30 and is traded for settlement on August 10. The accrued interest on $100,000 face amount of this note is _. A. $581.97B. $1,163.93C. $2,327.87D. $3,000.00 69. The yield t

61、o maturity of an 10-year zero coupon bond, with a par value of $1,000 and a market price of $625, is _. A. 4.8%B. 6.1%C. 7.7%D. 10.4%  Consider a newly issued TIPS bond with a three year maturity, par value of $1000, and a coupon rate of 5%. Assume annual coupon pa

62、yments.   70. What is the nominal rate of return on the TIPS bond in the first year? A. 5.00%B. 5.15%C. 8.15%D. 9.00% 71. What is the real rate of return on the TIPS bond in the first year? A. 5.00%B. 8.15%C. 7.15%D. 4.0

63、0%  On May 1, 2007, Joe Hill is considering one of the following newly-issued 10 year AAA corporate bonds.   72. Suppose market interest rates decline by 100 basis points (i.e., 1%). The effect of this decline would be: A. The price of Wildwood bond would decl

64、ine by more than the Asbury bond.B. The price of Wildwood bond would decline by less than the Asbury bond.C. The price of Wildwood bond would increase by more than the Asbury bond.D. The price of Wildwood bond would increase by less than the Asbury bond. 73. If interest rates are expected to rise, then Joe