CF Chap 8

A bond that makes no coupon payments and is initially priced at a deep discount is called a ________ bond.

• A) Treasury
• B) municipal
• C) floating-rate
• D) junk
• E) zero coupon

The stated interest payment, in dollars, made on a bond each period is called the bond's:

• A) coupon.
• B) face value.
• C) maturity.
• D) yield to maturity.
• E) coupon rate.

The principal amount of a bond that is repaid at the end of the loan term is called the bond's:

• A) coupon.
• B) face value.
• C) maturity.
• D) yield to maturity.
• E) coupon rate

The specified date on which the principal amount of a bond is repaid is called the bond's:

• A) coupon.
• B) face value.
• C) maturity.
• D) yield to maturity.
• E) coupon rate

The rate of return required by investors in the market for owning a bond is called the:

• A) coupon.
• B) face value.
• C) maturity.
• D) yield to maturity.
• E) coupon rate.

The annual interest paid by a bond divided by the bond's face value is called the:

• A) coupon.
• B) face value.
• C) maturity.
• D) yield to maturity.
• E) coupon rate

A bond with a face value of $1,000 that sells for $1,000 in the market is called a ________ bond.

• A) par value
• B) discount
• C) premium
• D) zero coupon
• E) floating rate

A bond with a face value of $1,000 that sells for less than $1,000 in the market is called a ________ bond.

• A) par
• B) discount
• C) premium
• D) zero coupon
• E) floating rate

A bond with a coupon rate of 6 percent that pays interest semiannually and is priced at par will have a market price of ________ and interest payments in the amount of ________ each.

• A) $1,006; $60
• B) $1,060; $30
• C) $1,060; $60
• D) $1,000; $30
• E) $1,000; $60

All else constant, a bond will sell at ________ when the yield to maturity is ________ the coupon rate.

• A) a premium; greater than
• B) a premium; equal to
• C) at par; greater than
• D) at par; less than
• E) a discount; greater than