FinanceProfessor.com

Bringing the real world to the classroom and vice versa!

 
 
Learn about what is going on in the Financial World.
Sign up for FinanceProfessor's free newsletter! 

 

Find  finance books at Amazon.com
 
 

Search FinanceProfessor.com
























Ask Jeeves!


 
 
All work and no play makes for sickly people!  Get out and workout.  Learn more about Running and fitness and see the other side of FinanceProfessor! 

 
 
Family-Friendly Site

 



 

Ask Jeeves!
 
 
Lotteries have been around for years.  In fact Thomas Jefferson ran a lottery.  So why not?  It is free and you might wind $1m..  Of course the odds are VERY VERY low, but....
Play LuckySurf

 
Quantitative Bond Questions
Multiple Choice.

1. What is the price of a 8%, 5-year annual coupon bond if investors require a 6% return?

a. $913.35
b. $1023.87
c. $1084.25
d. $1106.12
e. $1,060.23
2. What is the required return on a 4-year annual coupon bond that pays a 7% coupon if the bond is selling for $904.90
a. 7%
b. 12%
c. 10%
d. 9%
e. 8%
3. What is the price of a 10-year zero coupon bond if the marginal investor requires a 9% return?
a. $564.13
b. $1000.00
c. $455.55
d.  385.54
e. None of the above
4. What is the Yield to Maturity (YTM) on a 5-year zero coupon bond that sells for $497.18?
a. 15%
b. 12%.
c. 8.4%
d. 7.1%
e. 6%
5. What is the price of a perpetuity that pays a 10% coupon if investors demand a 7% return?
a. $1009.16
b. $1090.65
c. $1183.42
d. $1231.56
e. $1428.47
6.  What is the price of a 15-year corporate bond that matures in 10 years if it pays a 9% coupon semiannually and has a yield to maturity of 8%?
a. $1405
b. $1040
c. $711
d. $1367
e. $1428
7. What is the value of a  6% annual copon bond that has 8 years life remaining if investors require 11% for comparable bonds?
a. $914
b. $787
c. $742
d. $888
e. $821
8. What is the most you could pay for a 7% annual coupon bond that has 15 years life remaining if you require 8% for comparable bonds?
a. $914
b. $872
c. $742
d. $891
e. $818
9. What will be the capital gain for a 5 year 7% annual coupon bond if interest rates go from 9% to 7%?
a. $91.16
b. $77.89
c. $74.21
d. $84.22
e. $81.00
10.  A 10% semi-annual bond sells for $900.  What can you say about this?
a. YTM = 9%
b. YTM = 10%
c.  YTM > 10%
d. The bond is priced too high.
e. The bond is callable.

Answers

1. c 6. b
2. c 7. c
3. d 8. a
4. a 9. b 
5. e 10. c
    Do you have test questions you would like to include?  Build yor resume and see your work in print.  Send me your questions and you will be publicly thanked! email: jim@FinanceProfessor.com

    go back to FinanceProfessor.com Main page