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WorksheetsSecurity analysis and Investment - Lesson 6
Total questions: 10
Worksheet time: 4mins
How to calculate current yield of a bond
Annual Coupon/ Face value
Annual Coupon/ Market price
Which bond pays interest forever?
Zero - coupon bond
Coupon bond
Perpetual bond
If current market price of the bond is lower than face value. What is the relationship between coupon rate and current yield?
Coupon rate = Current yield
Coupon rate < Current yield
Coupon rate > Current yield
Imagine that you are holding the bond with market price lower than face value. If you hold the bond until maturity date, you could receive capital gain which is
positive number
negative number
Internal rate of return (IRR) is the rate which equalize
Face value versus present value of future cash flow
Market value versus present value of future cash flow
Internal rate of return which is paid to bond investor if he held the bond until maturity date has the name:
Current yield
Yield to maturity
Bond A has face value $1000, term to maturity: 10 years. The reasonable price of this bond at current time is $800. What happens with reasonable price of this bond after 2 years?
Increase
Decrease
Unchanged
People often said "Money never sleep". It means that:
Most of us reinvest money at the end of each year
Most of us don't reinvest money at the end of each year
At time t = 0, I have $100, interest rate = 10%. If I do compounding investment, how much money I could received after 3 years?
100/1.1^3
100/1.1^2
100*1.1^2
100*1.1^3
Which bond will pay lowest interest rate?
Commercial bank's bond
Corporate bond
Government bond
