chap007 - Chapter 007 Interest Rates and Bond Valuation...

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Chapter 007 Interest Rates and Bond Valuation Multiple Choice Questions 1. 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. SECTION: 7.1 TOPIC: COUPON TYPE: DEFINITIONS 2. The principal amount of a bond that is repaid at the end of the term is called the: a. coupon. B . face value. c. maturity. d. yield to maturity. e. coupon rate. SECTION: 7.1 TOPIC: FACE VALUE TYPE: DEFINITIONS 3. The specified date on which the principal amount of a bond is repaid is called the: a. coupon. b. face value. C . maturity. d. yield to maturity. e. coupon rate. SECTION: 7.1 TOPIC: MATURITY TYPE: DEFINITIONS 7-1
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Chapter 007 Interest Rates and Bond Valuation 4. 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. SECTION: 7.1 TOPIC: YIELD TO MATURITY TYPE: DEFINITIONS 5. The annual coupon divided by the face value of a bond is called the: a. coupon. b. face value. c. maturity. d. yield to maturity. E . coupon rate. SECTION: 7.1 TOPIC: COUPON RATE TYPE: DEFINITIONS 6. The annual coupon payment divided by the market price of a bond is called the: a. coupon rate. B . current yield. c. yield to maturity. d. bid-ask spread. e. capital gains yield. SECTION: 7.1 TOPIC: CURRENT YIELD TYPE: DEFINITIONS 7-2
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Chapter 007 Interest Rates and Bond Valuation 7. An indenture is: a. the annual amount which a bond issuer agrees to pay as interest on the debt. b. the written record of the original and all subsequent holders of each individual bond comprising a debt issue. c. a bond which is past its maturity date but has yet to be repaid. d. a bond which is secured by the fixed assets which are owned by the bond issuer. E . the written agreement between the bond issuer and the bondholders which details the terms of the debt issue. SECTION: 7.2 TOPIC: INDENTURE TYPE: DEFINITIONS 8. A bond for which the registrar of the issuer records ownership and for which payments are made directly to the owner of record is said to be in: a. new-issue condition. B . registered form. c. bearer form. d. debenture status. e. collateral status. SECTION: 7.2 TOPIC: REGISTERED FORM TYPE: DEFINITIONS 9. A bond which is issued without recording of the owner's name and for which payments are made to whomever has physical possession of the bond is said to be in: a. new-issue condition. b. registered form. C . bearer form. d. debenture status. e. collateral status. SECTION: 7.2 TOPIC: BEARER FORM TYPE: DEFINITIONS 7-3
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Chapter 007 Interest Rates and Bond Valuation 10. An unsecured debt of a firm with a maturity of 10 years or more is called a(n): a. unfunded liability. b. sinking funds. c. blanket bond. d. note. E . debenture. SECTION: 7.2 TOPIC: DEBENTURE TYPE: DEFINITIONS 11. An unsecured debt of a firm with a maturity of less than 10 years is called a(n): a. unfunded liability. b. sinking fund.
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This note was uploaded on 03/23/2011 for the course ECON 202098 taught by Professor Sameer during the Spring '11 term at University of Jordan.

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chap007 - Chapter 007 Interest Rates and Bond Valuation...

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