FIS-PGPISM-Quiz 2

What will be the closest investment to make today to earn Rs 1,00,000 after 10 years assuming a continuous compound interest rate of 9%?

• Rs 64,993
• Rs 1,53,862
• Rs 2,36,736
• Rs 42,241

A 7-year, $1000 par, semi-annual pay 8% fixed coupon bond has a market discount rate of 6% with 2 years to maturity. What is the market price of the bond closest to?

• $1037
• $1019
• $963
• $936

Kennedy is choosing between bonds A and B. Both bonds have the same time to maturity and are trading at the same yield. Bond A has a lower coupon rate while Bond B has a higher coupon rate. Which of the 2 bonds should Kennedy choose, given that he has a preference for a bond with lower price volatility as he intends to sell the bond in the short term.

• Bond A
• Bond B
• Does not make a difference

A 7% annual fixed coupon bond has 3 years to maturity. Given the following spot rates, calculate the price (per 100 par) that the bond should be trading at. Spot Rates 1 yr: 6.6% 2 yr: 7.1% 3 yr: 7.3%

• 112.82
• 99.28
• 106.30
• 108.30

A $1000 par 10% semi-annual fixed coupon bond with has exactly 2 years to maturity and the coupon has just been paid. The market discount rate of the bond is 8%. Calculate the price of the bond.

• $1036.30
• $1038.23
• $989.23
• $980.33

A fixed 6% quarterly-pay coupon bond with 5.5 years to maturity is trading at 98.6 per 100 par. What is the effective yield of the bond?

• 6.30%
• 6.31%
• 6.45%
• 6.35%

A 10-year, 8% semi-annual fixed coupon callable bond can be called after 5 years from issuance at a call price of 101. 2 years after its issuance, the price of the bond has dropped to 97 per 100 par. Calculate the yield-to-call at this point.

• 9.47%
• 9.17%
• 7.28%
• 7.82%

A bond has a 6% coupon rate (annual rate, paid semi-annually), £100 par value, exactly 4 years left till maturity and a current yield to maturity of 7% (annualised). The price ofthis bond would be closest to:

• £100
• £96.80
• £96.56
• £98.12

A Bond of face value Rs 100 with 10-year residual maturity, paying 8.2% semi-annual coupon, is currently trading at a yield of 7.80%. What would be its approximate Price?

• Rs 101.2684
• Rs 100.3423
• Rs 103.5684
• Rs 102.7423

A Bond would receive Rs 6 every six-months for the next 2 years and Rs 100 (face value) at the end of these 2 years as the redemption value. What would be its price, if the market yield has increased by 100 bps after its coupon was decided (when it was issued at Par)?

• Rs 101.25
• Rs 98.29
• Rs 98.95
• Rs 99.45