chap04 - You find that the yield on a 4-year bond is 8%...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Sheet1 Page 1 You find that the yield on a 4-year bond is 8% while that of a 3-year bond is 7%. What should be the yield on a 1-year bond be g a. 1.00% b. 7.50% c. 9.34% d. 11.06% status: not answered () correct: d your answer: -------------------------------------------------------------------------------- 2 The price of a bond in the Wall Street Journal is 107:16. What is the yield to maturity of the bond if it has 6 years to maturity a a. 8.0000% b. 8.4718% c. 6.4718% d. 3.2359% status: not answered () correct: c your answer: -------------------------------------------------------------------------------- 3 During the preceding year you had a real return of 10% on an investment. At that same time, inflation was 5%. What was yo u a. 15.50% b. 10.00% c. 5.00% d. 4.76% status: not answered () correct: a your answer: -------------------------------------------------------------------------------- 4 A bond that gives the issuer the right to repurchase in the future at a predetermined price is: a. a putable bond. b. a callable 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
Sheet1 Page 2 c. a purchaseble bond. d. called an option bond. status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 5 If a risky asset trades at a higher price than a riskless asset, then: a. the risky asset must offer investors higher future cash flows than the riskless asset. b. the risky asset must offer investors lower future cash flows than the riskless asset. c. the risky asset must have a discount rate that is lower than the riskless asset. d. none of the above. status: not answered () correct: a your answer: -------------------------------------------------------------------------------- 6 You own a bond that pays a 10% annualized semi-annual coupon rate and has 6 years to maturity. If the discount rate incre a a. $119.90 b. $51.39 c. ($51.39) d. ($119.90) status: not answered () correct: c your answer: -------------------------------------------------------------------------------- 7 You will receive $100,000 at the end of each of the next 5 years. If the proper discount rate to that series of payments is 5% , a. $500,000.00 b. $432,947.67 c. $391,763.08 d. $95,238.10
Background image of page 2
Sheet1 Page 3 status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 8 The marginal cost of investing in an asset is: a. the opportunity cost of committing funds to this asset rather than to an equally risky alternative.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 10

chap04 - You find that the yield on a 4-year bond is 8%...

This preview shows document pages 1 - 4. Sign up to view the full document.

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