公司财务管理习题

1、精选优质文档-倾情为你奉上Chapter 06Interest Rates and Bond Valuation  Multiple Choice Questions 1. When you refer to a bond's coupon, you are referring to which one of the following? A. Difference between the purchase price and the face valueB. Annual interest divided by the cu

2、rrent bond priceC. Difference between the bid and ask priceD. Annual interest paymentE. Principal amount of the bond 2. What is the principal amount of a bond that is repaid at the end of the loan term called? A. CouponB. Market priceC. Accrued priceD.

3、60;Dirty priceE. Face value 3. The annual interest divided by the face value of a bond is referred to as the: A. market rate.B. call rate.C. coupon rate.D. current yield.E. yield-to-maturity. 4. On which one of the following dates is the princip

4、al amount of a bond repaid? A. Coupon dateB. Issue dateC. Discount dateD. Maturity dateE. Face date 5. Which one of the following terms refers to a bond's rate of return that is required by the market place? A. Coupon rateB. Yield to maturit

5、yC. Dirty yieldD. Call yieldE. Discount rate 6. The current yield on a bond is equal to the annual interest divided by which one of the following? A. Issue priceB. Maturity valueC. Face amountD. Current market priceE. Current par value 7.&#

6、160;The written agreement that contains the specific details related to a bond issue is called the bond: A. indenture.B. debenture.C. document.D. registration statement.E. issue paper. 8. A registered form bond is defined as a bond that: A. is a bear

7、er bond.B. is held in street name.C. pays coupon payments directly to the owner of record.D. is listed with the Securities Exchange Commission (SEC).E. is unsecured. 9. This morning, Jeff found a bond certificate lying on the floor of a bank. He picked it up and noticed

8、 that the bond matured today. He presented the bond to the bank teller and received both the principal and interest payment. The bond that Jeff found must have been which one of the following? A. DebentureB. NoteC. Registered form bondD. Bearer form bondE. Callable bond

9、 10. Miller Farm Products is issuing a 15-year, unsecured bond. Based on this information, you know that this debt can be described as a: A. note.B. bearer form bond.C. debenture.D. registered form bond.E. call protected bond. 11. A note is: A.&

10、#160;unsecured debt that is generally payable within the next ten years.B. a formal type of loan that is secured by real estate.C. long-term debt secured by part, or all, of the assets of the borrower.D. debt that is secured by a borrower's accounts receivables.E. the written

11、 agreement which details the information relative to a bond issue. 12. What term is used to describe an account that a bond trustee manages for the sole purpose of redeeming bonds early? A. Registered accountB. Bearer accountC. Call accountD. Sinking fundE. Pr

12、emium fund 13. A call provision grants the bond issuer the: A. right to contact each bondholder to determine if he or she would like to extend the term of his or her bonds.B. option to exchange the bonds for equity securities.C. right to automatically extend the bond

13、9;s maturity date.D. right to repurchase the bonds on the open market prior to maturity.E. option of repurchasing the bonds prior to maturity at a pre-specified price. 14. The call premium is the amount by which the: A. market price exceeds the par value.B. market

14、price exceeds the call price.C. face value exceeds the market price.D. call price exceeds the par value.E. call price exceeds the market price. 15. Dexter, Inc. has a bond issue outstanding. The issue's indenture provision prohibits the firm from redeeming the bonds duri

15、ng the first three years. This provision is referred to as the _ provision. A. safeguardB. marketC. liquidityD. deferred callE. sinking fund 16. Travis recently purchased a callable bond. However, that bond cannot be currently redeemed by the issuer. Thus, the

16、 bond must currently be: A. subject to a sinking fund provision.B. a debenture.C. a "fallen angel".D. call protected.E. unrated. 17. A protective covenant: A. protects the borrower from unscrupulous practices by the lender.B. is design

17、ed to protect the bond dealer from potential legal liability related to the bond issue.C. prevents a bond from being called.D. limits the actions of the borrower.E. guarantees that a bond will be repaid in full with interest. 18. Manning, Inc. originally issued bonds that we

18、re rated investment grade. These bonds have now been downgraded to junk status. Which one of the following terms applies to this situation? A. Called bondB. Converted bondC. Protected covenantD. Fallen angelE. Floating bond 19. Which one of the following terms

19、 applies to a bond that initially sells at a deep discount and pays no interest payments? A. CallableB. IncomeC. Zero couponD. ConvertibleE. Tax-free 20. The price at which a dealer will purchase a bond is called the _ price. A. askedB. faceC.&#

20、160;callD. putE. bid 21. The price at which an investor can purchase a bond from a dealer is called the _ price. A. askedB. couponC. callD. faceE. bid 22. A bond trader just purchased and resold a bond. The amount of profit earned by the tr

21、ader from this purchase and resale is referred to as the: A. market yield.B. yield-to-call.C. bid-ask spread.D. current yield.E. bond premium. 23. Which one of the following is the quoted price of a bond? A. Par valueB. Discount priceC. Fac

22、e valueD. Dirty priceE. Clean price 24. Which one of the following is the price that an investor pays to purchase an outstanding bond? A. Dirty priceB. Face valueC. Call priceD. Bid priceE. Clean price 25. A real rate of return is defined a

23、s a rate that has been adjusted for which one of the following? A. InflationB. Interest rate riskC. TaxesD. LiquidityE. Default risk 26. Which one of the following is the rate of return an investor earns on a bond before adjusting for inflation? A. N

24、ominal rateB. Real rateC. Dirty rateD. Coupon rateE. Clean rate 27. Which one of the following refers to the relationship between nominal returns, real returns, and inflation? A. Call premiumB. Fisher effectC. Conversion ratioD. Bid-ask spreadE.

25、 Clean-dirty spread 28. The term structure of interest rates represents the relationship between which of the following? A. Nominal rates on risk-free and risky bondsB. Real rates on risk-free and risky bondsC. Nominal and real rates on default-free, pure discount

26、bondsD. Market and coupon rates on default-free, pure discount bondsE. Nominal rates on default-free, pure discount bonds and time to maturity 29. The inflation premium: A. increases the real return.B. is inversely related to the time to maturity.C. remains co

27、nstant over time.D. rewards investors for accepting interest rate risk.E. compensates investors for expected price increases. 30. Changes in interest rates affect bond prices. Which one of the following compensates bond investors for this risk? A. Taxability risk premiu

28、mB. Default risk premiumC. Interest rate risk premiumD. Real rate of returnE. Bond premium 31. The Treasury yield curve plots the yields on Treasury notes and bonds relative to the _ of those securities. A. face valueB. market priceC. maturityD. 

29、;coupon rateE. issue date 32. Which one of the following represents additional compensation provided to bondholders to offset the possibility that the bond issuer might not pay the interest and/or principal payments as expected? A. Interest rate risk premiumB. Inflation

30、 premiumC. Liquidity premiumD. Taxability premiumE. Default risk premium 33. Which one of the following premiums is paid on a corporate bond due to its tax status? A. Interest rate risk premiumB. Inflation premiumC. Liquidity premiumD. Taxability pre

31、miumE. Default risk premium 34. Which one of the following provides compensation to a bondholder when a bond is not readily marketable at its full value? A. Interest rate risk premiumB. Inflation premiumC. Liquidity premiumD. Taxability premiumE. Default

32、risk premium 35. When a bond's yield to maturity is less than the bond's coupon rate, the bond: A. had to be recently issued.B. is selling at a premium.C. has reached its maturity date.D. is priced at par.E. is selling at a discount. 36. The

33、yield to maturity on a discount bond is: A. equal to both the coupon rate and the current yield.B. is equal to the current yield but greater than the coupon rate.C. is greater than both the current yield and the coupon rate.D. is less than the current yield but greater than

34、the coupon rate.E. is less than both the current yield and the coupon rate. 37. Which one of the following statements is true? A. The current yield on a par value bond will exceed the bond's yield-to-maturity.B. The yield to maturity on a premium bond exceeds the bo

35、nd's coupon rate.C. The current yield on a premium bond is equal to the bond's coupon rate.D. A premium bond has a current yield that exceeds the bond's coupon rate.E. A discount bond has a coupon rate that is less than the bond's yield to maturity. 38. The v

36、alue of a bond is dependent upon the: A. coupon rate and the current yield.B. coupon rate and the yield to maturity.C. current yield and the yield to maturity.D. coupon rate but neither the current yield nor the yield to maturity.E. yield to maturity but neither the cur

37、rent yield nor the coupon rate. 39. Generally speaking, bonds issued in the U.S. pay interest on a(n) _ basis. A. annualB. semi-annualC. quarterlyD. monthlyE. daily 40. Which one of the following bonds is the least sensitive to changes in market inte

38、rest rates? A. Zero-coupon, 10 yearB. 6 percent annual coupon, 10 yearC. Zero-coupon, 4 yearD. 8 percent annual coupon, 4 yearE. 6 percent annual coupon, 4 year 41. An unexpected decrease in market interest rates will cause a: A. coupon bond's cu

39、rrent yield to increase.B. zero coupon bond's price to decrease.C. fixed-rate bond's coupon rate to decrease.D. zero-coupon bond's current yield to decrease.E. coupon bond's yield-to-maturity to decrease. 42. Which of the following combinations is assure

40、d to decrease the interest rate sensitivity of a bond? A. Increase in both the time to maturity and the coupon rateB. Increase in the time to maturity and a decrease in the coupon rateC. Decrease in both the time to maturity and the coupon rateD. Decrease in the time to matu

41、rity and an increase in the coupon rateE. A decrease in the time to maturity and an increase in the face value 43. Which one of the following statements is correct? A. Bonds are generally called at par value.B. A current list of all bondholders is maintained whenever a

42、firm issues bearer bonds.C. An indenture is a contract between a bond's issuer and its holders.D. Collateralized bonds are called debentures.E. A bondholder has the right to determine when his or her bond is called. 44. Which of the following can generally be found in a

43、bond's indenture agreement? I. terms of repaymentII. names of registered shareholdersIII. protective covenantsIV. total amount of the bond issue A. I and III onlyB. II, III, and IV onlyC. I, II, and III onlyD. I, III, and IV onlyE. I, II, III, and IV 45. W

44、hich of the following characteristics are most commonly associated with corporate bonds issued in the U.S.? I. registered formII. bearer formIII. quarterly coupon paymentsIV. semiannual coupon payments A. I and III onlyB. I and IV onlyC. II and III onlyD. II and IV onlyE.

45、60;III only 46. Which one of the following might be included in a bond's list of negative covenants? A. Maintaining a current ratio of 1.2 or moreB. Maintaining a minimum cash balance of $1.2 millionC. Limiting cash dividends to $1 per share or lessD. Maintaini

46、ng a times interest earned ratio of 2 or moreE. Providing audited financial statements in a timely manner 47. Which one of the following terms denotes for certain that a bond is unsecured? A. DebentureB. Bearer formC. Call provisionD. Sinking fundE. Blank

47、et mortgage 48. A bond for which no specific property has been pledged as security is classified as a: A. bearer bond.B. trust deed bond.C. registered bond.D. debenture.E. sinking fund bond. 49. Which one of the following statements concerning sinkin

48、g funds is correct? A. Bond issuers must fund a sinking fund at the time the bonds are issued.B. Sinking funds must include at least one "balloon payment".C. Sinking funds must be funded annually, starting on the issue date.D. Sinking funds may be used to purchase

49、bonds in the open market.E. Sinking funds can only be used to call bonds. 50. A callable bond: A. is generally call protected during the entire term of the bond issue.B. generally will have a call protection period during the final three years prior to maturity.C. 

50、may be structured to pay bondholders the current value of the bond on the date of call.D. is prohibited from having a sinking fund also.E. is frequently called at a price that is less than par value. 51. A bond has a make-whole call provision. Given this, you know that the: 

51、A. bond will always sell at par.B. call premium must equal the annual coupon payment.C. call price is directly related to the market rate of interest.D. call price is inversely related to the market rate of interest.E. bond must be a zero-coupon bond. 52. What is t

52、he primary purpose of bond covenants? A. Meet regulatory requirementsB. Describe repayment termsC. Lender protectionD. Define a bond's ratingE. Increase a bond's seniority position 53. The primary purpose of protective covenants is to help: A.

53、0;reduce interest rate risk.B. the issuer in case of default.C. protect bondholders from issuer actions.D. bondholders whose bonds are called.E. convert bearer bonds into registered form. 54. The lowest rating a bond can receive from Moody's and still be classified

54、as an investment-quality bond is: A. BB.B. BBB.C. B.D. Ba.E. Baa. 55. In relation to bonds, which one of the following terms has the same meaning as the term "crossover"? A. SpeculativeB. 5BC. Fallen angelD. JunkE. Tripl

55、e A 56. Which one of the following terms applies to a junk bond that was originally issued with a bond rating of AA? A. DebentureB. CovenantC. Fallen angelD. SinkingE. Triple B 57. Which of the following ratings indicate that a bond is low-quality? I

56、. BaaII. BBIII. BIV. Ba A. II onlyB. II and III onlyC. II, III, and IV onlyD. I, II, and III onlyE. I, II, III, and IV 58. Municipal bonds are: A. generally purchased by tax-exempt investors.B. risk-free.C. issued by federal, state, and loc

57、al governmental bodies.D. zero-coupon bonds.E. generally callable. 59. Which one of the following individuals is most apt to purchase a municipal bond? A. Minimum-wage employeeB. Retired individual with minimal current incomeC. Recent college graduateD. T

58、ax-exempt organizationE. Highly-compensated business owner 60. Zero-coupon bonds: A. are valued using simple interest.B. are only issued by the U.S. Treasury.C. create a tax deduction for the issuer only at maturity.D. are issued at a premium.E. create an

59、nual taxable income to individual bondholders. 61. A "floater" bond frequently has a: A. flexible deferred call period.B. fixed yield-to-maturity but a flexible coupon payment.C. a government guarantee.D. fixed-dollar obligation.E. a put provision.&#

60、160;62. Which one of the following is a unique characteristic of an income bond? A. Interest income is tax-freeB. Interest income is paid at the time of issuanceC. Coupon payments are dependent upon the issuer's incomeD. Coupon payments are paid on a regular monthly

61、 basisE. Coupon payments can be converted into equity shares 63. Which one of the following types of bonds should an investor purchase if he or she is primarily concerned about ensuring that bond ownership will increase his or her purchasing power? A. OTCB. DeathC. 

62、;CATD. PETSE. TIPS 64. Which one of the following types of bonds permits its issuer to forego paying interest payments if certain natural events cause significant losses? A. PETSB. PUTC. CATD. PINESE. LIBOR 65. Which one of the following st

63、atements is correct? A. Bond markets have less daily trading volume than equity markets.B. There are less bond issues than there are equity issues.C. Municipal bond prices are highly transparent.D. Bond markets are dealer based.E. Most bond trades occur on the NYSE.

64、0;66. What is the price of a $1,000 face value bond if the quoted price is 102.1? A. $102.10B. $1,002.10C. $1,020.01D. $1,020.10E. $1,021.00 67. A bond dealer sells at the _ price and buys at the _ price. A. clean; dirtyB. dirty; cleanC.

65、60;bid; askedD. asked; bidE. asked; asked 68. Which one of the following statements is correct regarding mortgage backed securities (MBSs)? A. There is a separate MBS for each individual mortgage processed by a mortgage broker.B. A MBS is a type of a debenture.C.&#

66、160;The originating bank is the seller of MBSs to investors.D. Investors in MBSs are protected from default.E. Investors in MBSs are subject to real estate deflation risk. 69. The "R" in the Fisher effect formula represents the: A. current yield.B. real r

67、eturn.C. coupon rate.D. inflation rate.E. nominal return. 70. An upward-sloping term structure of interest rates indicates: A. the real rate of return is lower for short-term bonds than for long-term bonds.B. there is an indirect relationship between real interest rates and time to maturity.C. there is an indirect relationship between nominal interest r