FI 1.12 13.03

FI 1.12 13.03

Professional Development

10 Qs

quiz-placeholder

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FI 1.12 13.03

FI 1.12 13.03

Assessment

Quiz

Professional Development

Professional Development

Hard

Created by

Education Trustville

Used 1+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

The maturity effect is least likely to hold for a:
A. low-coupon, long-term bond trading at a discount.
B. zero-coupon bond.
C. low-coupon, long-term bond trading at a premium.

2.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

All else being equal, the difference between the nominal spread and the Z-spread for a non-Treasury security will most likely be larger when the:
A. yield curve is steep.
B. security has a bullet maturity rather than an amortizing structure.
C. yield curve is flat.

3.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Q. A bond offers an annual coupon rate of 4%, with interest paid semiannually. The bond matures in two years. At a market discount rate of 6%, the price of this bond per 100 of par value is closest to:
A. 93.07.
B. 96.28.
C. 96.33.

4.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Q. A portfolio manager is considering the purchase of a bond with a 5.5% coupon rate that pays interest annually and matures in three years. If the required rate of return on the bond is 5%, the price of the bond per 100 of par value is closest to:
A. 98.65.
B. 101.36.
C. 106.43.

5.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Q. The bond equivalent yield of a 180-day banker’s acceptance quoted at a discount rate of 4.25% for a 360-day year is closest to:
A. 4.31%.
B. 4.34%.
C. 4.40%.

6.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Q. A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. At a market discount rate of 3%, the price of this bond per 100 of par value is closest to:
A. 106.60.
B. 112.54.
C. 143.90.

7.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

An investor purchases a 5% coupon bond maturing in 15 years for par value. Immediately after purchase, the yield required by the market increases. The investor would then most likely have to sell the bond at:
A. a premium.
B. a discount.
C. par.

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