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ureater J 5. The return on a 8% coupon bond that is initinJJy bought for $1000 and is sold for $900 a year
later is:
a l 10%
b.) 2%
c) d) 0%
2% 16. The annualized return on a $1000 par value. 10 year. 10'!,0 coupon bond thill is initially
bought for $1400 nnd is hdd to maturity is: exactly 10%
b) greater tlwn 0%, but h:ss th an I O"Â·o
c.) greater than I0% but Jess than 20"1J
d.) 0% or less
a J 17. If a discount hond was actually bought by an investor at its face (par) va lue, then the return
on thi s investment would be: I\ 0%
exactly 0%
greater than 0% a.) less than
b .) c.) I R. For whi ch one of the followin g is the current rield the most accurate representation of the
tmc yield on the bond?
 a l yea r bond
h ) a 5 yea r bond
c) a 10 year bond
<.L) a 30 year bond
a .) 19. If interest rates are forecast to ri se by a fixed amoun t fo r the indefi nit e future, the pri ce of a 5yea r bond wi II _
_ by
than the pri ce of a !yea r bond .
rise, more
ri se...
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This note was uploaded on 01/19/2014 for the course ECON 345 taught by Professor Sumaila during the Winter '09 term at UBC.
 Winter '09
 SUMAILA

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