CHAPTER 19
THE ANALYSIS AND VALUATION OF BONDS
TRUE/FALSE QUESTIONS
(t) 1 For a bond the prent value model incorporates both the coupon receipts and the capital gain or loss.
(f) 2 The major problem facing a bond analyst is the ability to forecast the basic interest rate level since yield spreads are generally inconquential.
(t) 3 Yield to maturity and current yield are equal when the bond is lling for exactly par value.
(t) 4 An interest rate is the price of loanable funds.
(f) 5 The internal rate of return is that discount rate that ts the prent value of cash flows from an investment equal to its par value.
(f) 6 If an investor buys a high coupon bond, and rates then fall, the investor has “locked up” that high yield as a realized yield.
(f) 7 The three major theories explaining the term structure of interest rates are the expectations hypothesis, the liquidity differential hypothesis, and the gmented quality hypothesis.
(f) 8 The expectations hypothesis is also known as both the institutional theory and the hedging pressure theory.
(f) 9 Bond price volatility varies directly with the term to maturity and directly with the coupon.
(t) 10 The longer the time to maturity, the greater the percentage change in a bond’s price.
约翰杜威
(t) 11 There is an inver relationship between duration and coupon.
(t) 12 The lower a bond’s yield to maturity, the greater its duration.
(t) 13 Becau you expect market interest rates to decline during the next four months, if you were offered two bonds with equal duration, you would lect the one with the higher measure of convexity.
MULTIPLE CHOICE QUESTIONS
(e) 1 The annual interest paid on a bond relative to its prevailing market price is called its _____________.
a) Promid yield我的抉择
b) Yield to maturity
c) Coupon rate
d) Effective yield
e) Current yield行人更在春山外
(d) 2 If the holding period is equal to the term to maturity for a corporate bond the rate of discount reprents the
a) Coupon yield.
b) Effective yield.
纸折垃圾桶 c) Yield to call.
d) Yield to maturity.
e) Reinvestment rate.
(d) 3 The nominal yield of a bond is the
a) Annual coupon as a percent of the current price.
b) Annual rate earned including the capital gain or loss.
c) Rate earned giving consideration to coupon reinvestment.
d) Coupon rate.
e) Promid yield to maturity.
(a) 4 If the coupon payments are not reinvested during the life of the issue then the
a) Promid yield is greater than the realized yield.
b) Promid yield is less than the realized yield.
c) Nominal yield declines.
d) Nominal yield is greater than the promid yield.
e) Current yield equals the yield to maturity.
(d) 5 The importance of the reinvestment assumption increas with a _______ coupon and a _________ term to maturity.
a) Low, short
b) Low, long
c) High, short
d) High, long
e) Zero, very long
(e) 6 The best way for an investor to "lock in" to high interest rates would be to purcha a bond that has a _____ coupon and a ______ term to maturity.
a) Low, short
b) Low, long
c) High, short
d) High, long
e) Zero, very long
(a) 7 The yield to call is a more conrvative yield measure whenever the price of a callable bond is quoted at a value
a) Equal to or greater than par plus one year's interest.
b) Equal to par.
c) Equal to par less one year's interest.
d) Less than par.
e) Five percent over par.
(d) 8 Which of the following is not a major risk premium component for bond investors?
a) Quality differentials.
b) Term to maturity.
c) Indenture provisions.
d) Yield to maturity.
e) Exchange rate risk differences.
(b) 9 The term structure of interest rates is a static function that relates the
存在符号
变生肘腋 a) Term to call and the yield to maturity.
b) Term to maturity and the yield to maturity.
c) Term to call and the yield to call.
d) Term to maturity and the coupon rate.
e) Term to maturity and the current yield.
(c) 10 There are four major factors accounting for the existence of yield differentials. Which of the following is not a factor?
a) Segments
b) Sectors
c) Indentures
d) Coupons
e)Maturities
持久和平打一地名
(e) 11 The convexity of a bond is affected as follows:
a) Positively with maturity.
非谓语动词的用法总结 b) Positively with yield.
c) Inverly with coupon.
d) Choices a and b
e) Choices a and c
(e) 12 Which of the following statements is true?
a) An inver relationship exists between coupon and convexity.
b) A direct relationship exists between maturity and convexity.
c) An inver relationship exists between yield and convexity.
d) Choices a and c only
e) All of the above statements are true
