投资学investment_题库Chap14
Multiple Choice Questions
1. The current yield on a bond is equal to ________.
A) annual interest divided by the current market price
B) the yield to maturity
C) annual interest divided by the par value
D) the internal rate of return
E) none of the above
涨薪申请Answer: A Difficulty: Easy
Rationale: A is current yield and is quoted as such in the financial press.
3. If a 6% coupon bond is trading for $950.00, it has a current yield of ____________
percent.
A) 6.5
B) 6.3
C) 6.1
晚婚假期D) 6.0
E) 6.6
Answer: B Difficulty: Easy
Rationale: 60/950 = 6.3.
6. A coupon bond pays annual interest, has a par value of $1,000, matures in 4 years, has a coupon rate of 10%, and has a yield to maturity of 12%. The current yield on this bond is
___________.
A) 10.65%
夜夜难熬B) 10.45%
C) 10.95%
D) 10.52%
E) none of the above
Answer: A Difficulty: Moderate
Rationale: FV = 1000, n = 4, PMT = 100, i = 12, PV= 939.25; $100 / $939.25 = 10.65%.
8. Of the following four investments, ________ is considered the safest.
A) commercial paper
B) corporate bonds
C) U. S. Agency issues
D) Treasury bonds
E) Treasury bills
Answer: E Difficulty: Easy
Rationale: Only Treasury issues are insured by the U. S. government; the shorter-term the instrument, the safer the instrument.
9. To earn a high rating from the bond rating agencies, a firm should have
A) a low times interest earned ratio
B) a low debt to equity ratio
C) a high quick ratio
D) B and C
E) A and C
Answer: D Difficulty: Easy
Rationale: High values for the times interest and quick ratios and a low debt to equity ratio are desirable indicators of safety.
关于过年的传说10. At issue, coupon bonds typically ll ________.
A) above par value
B) below par
C) at or near par value
D) at a value unrelated to par
红素E) none of the above
Answer: C Difficulty: Easy
Rationale: If the investment banker has appraid the market and the quality of the bond correctly, the bond will ll at or near par (unless interest rates have changed very
dramatically and very quickly around the time of issuance).
11. Accrued interest
A) is quoted in the bond price in the financial press.
B) must be paid by the buyer of the bond and remitted to the ller of the bond.
C) must be paid to the broker for the inconvenience of lling bonds between maturity
dates.
D) A and B.
E) A and C.
Answer: B Difficulty: Moderate
Rationale: Accrued interest must be paid by the buyer, but is not included in the
种子怎么画quotations page price.
12. The invoice price of a bond that a buyer would pay is equal to
A) the asked price plus accrued interest.
B) the asked price less accrued interest.
C) the bid price plus accrued interest.
D) the bid price less accrued interest.
E) the bid price.
Answer: A Difficulty: Easy
Rationale: The buyer of a bond will buy at the asked price and will also be invoiced for any accrued interest due to the ller.
13. An 8% coupon U. S. Treasury note pays interest on May 30 and November 30 and is
traded for ttlement on August 15. The accrued interest on the $100,000 face value of this note is _________.
A) $491.80
B) $800.00
C) $983.61
D) $1,661.20
E) none of the above
Answer: D Difficulty: Moderate
Rationale: 76/183($4,000) = $1,661.20. Approximation: .08/12*100,000=666.67 per month. 666.67/month * 2.5 months = 1.666.67.
14. A coupon bond is reported as having an ask price of 113% of the $1,000 par value in the
Wall Street Journal. If the last interest payment was made two months ago and the coupon rate is 12%, the invoice price of the bond will be ____________.
A) $1,100
B) $1,110
C) $1,150
D) $1,160
E) none of the above
Answer: C Difficulty: Moderate
Rationale: $1,130 + $20 (accrued interest) = $1,150.
15. The bonds of Ford Motor Company have received a rating of "D" by Moody's. The "D"
rating indicates
A) the bonds are insured
B) the bonds are junk bonds
C) the bonds are referred to as "high yield" bonds
D) A and B
E) B and C
Answer: E Difficulty: Easy
Rationale: D ratings are risky bonds, often called junk bonds (or high yield bonds by tho marketing such bonds).
16. The bond market
A) can be quite "thin".
B) primarily consists of a network of bond dealers in the over the counter market.
C) consists of many investors on any given day.
D) A and B.
E) B and C.
Answer: D Difficulty: Easy
Rationale: The bond market, unlike the stock market, can be a very thinly traded market.
In addition, most bonds are traded by dealers.
17. Ceteris paribus, the price and yield on a bond are
A) positively related.
B) negatively related.
C) sometimes positively and sometimes negatively related.
E) not related.
E) indefinitely related.
Answer: B Difficulty: Easy
凯尔安德森
Rationale: Bond prices and yields are inverly related.
18. The ______ is a measure of the average rate of return an investor will earn if the investor
buys the bond now and holds until maturity.
A) current yield
B) dividend yield
C) P/E ratio
D) yield to maturity
E) discount yield
Answer: D Difficulty: Easy
Rationale: The current yield is the annual interest as a percent of current market price;
the other choices do not apply to bonds.
19. The _________ gives the number of shares for which each convertible bond can be
exchanged.
A) conversion ratio
B) current ratio
C) P/E ratio
D) conversion premium
E) convertible floor
Answer: A Difficulty: Easy
Rationale: The conversion premium is the amount for which the bond lls above
conversion value; the price of bond as a straight bond provides the floor. The other terms are not specifically relevant to convertible bonds.
20. A coupon bond is a bond that _________.
A) pays interest on a regular basis (typically every six months)
B) does not pay interest on a regular basis but pays a lump sum at maturity
C) can always be converted into a specific number of shares of common stock in the
issuing company
D) always lls at par
E) none of the above
Answer: A Difficulty: Easy
Rationale: A coupon bond will pay the coupon rate of interest on a miannual basis unless the firm defaults on the bond. Convertible bonds are specific types of bonds. 21. A ___________ bond is a bond where the bondholder has the right to cash in the bond
before maturity at a specified price after a specific date.
A) callable
B) coupon
C) put
D) Treasury
E) zero-coupon
Answer: C Difficulty: Easy
Rationale: Any bond may be redeemed prior to maturity, but all bonds other than put bonds are redeemed at a price determined by the prevailing interest rates.
22. Callable bonds
A) are called when interest rates decline appreciably.
B) have a call price that declines as time pass.
沟通的定义C) are called when interest rates increa appreciably.
D) A and B.
E) B and C.
Answer: D Difficulty: Easy
Rationale: Callable bonds often are refunded (called) when interest rates decline
appreciably. The call price of the bond (approximately par and one year's coupon
payment) declines to par as time pass and maturity is reached.
23. A Treasury bond due in one year has a yield of 5.7%; a Treasury bond due in 5 years has
a yield of 6.2%. A bond issued by Ford Motor Company due in 5 years has a yield of
7.5%; a bond issued by Shell Oil due in one year has a yield of 6.5%. The default risk
premiums on the bonds issued by Shell and Ford, respectively, are
A) 1.0% and 1.2%
B) 0.7% and 1.5%
C) 1.2% and 1.0%
D) 0.8% and 1.3%
E) none of the above
