Finance Chp 7 - Question 1 1. All else constant, a bond...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Question 1 1. All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. Answer a premium; less than a premium; equal to a discount; less than a discount; higher than par; less than 0.1 points Question 2 1. Which one of the following is the price a dealer will pay to purchase a bond? Answer call price asked price bid price bid-ask spread par value 0.1 points Question 3 1. A Treasury bond is quoted as 99:11 asked and 99:09 bid. What is the bid-ask spread in dollars on a $5,000 face value bond? Answer $0.03 $0.63 $1.00 $3.13 $6.25 0.1 points Question 4 1. Which one of the following rates represents the change, if any, in your purchasing power as a result of owning a bond?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Answer risk-free rate realized rate nominal rate real rate current rate 0.1 points Question 5 1. A 6 percent, annual coupon bond is currently selling at a premium and matures in 7 years. The bond was originally issued 3 years ago at par. Which one of the following statements
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/31/2011 for the course FIN 550 taught by Professor Rajneeshsharma during the Summer '11 term at Saint Joseph's University.

Page1 / 4

Finance Chp 7 - Question 1 1. All else constant, a bond...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online