1.
What is the name of the branch of accounting concerned with
providing managers and administrators with information to
facilitate the planning and control of business operations?
a. Management accounting
b. Auditing
c. Financial accounting
d. Bookkeepin
The following information relates to Questions 1-4
A bond with 5 years remaining until maturity is currently trading for 101 per 100 of par value. The bond offers a 6%
coupon rate with interest paid semiannually. The bond is first callable in 3 years, and
1.
2.
365-day year bank certificate of deposit has an initial principal amount of USD 96.5 million and a
A
redemption amount due at maturity of USD 100 million. The number of days between settlement and maturity
is 350. The bond equivalent yield is closes
Sample problems
Fixed Income Strategies BUSI 3460U
Chapter 5
1.
2.
3.
What is a negative covenant? What is an afirmative covenant?
What is meant by the agency problem with regards to company management?
What are some of the major factors considered by rat
T-Bill Pricing Canada
1. Calculate the Annualized interest rate of the following Canadian T-Bills: Par Value = $1,000
Time to Maturity
6 Months (181 days)
6 Months (181 days)
3 Months (90 days)
3 Months (90 days)
1 Month (31 days)
1 Month (30 days)
15 day
1
Chapter 3 Introduction to Fixed-Income
Valuation
1. An investor considers the purchase of a 2-year bond with a 5% coupon rate, with interest
paid annually. Assuming the sequence of spot rates shown below, the price of the bond
is closest to:
Time-to-Mat
Sample problems
Fixed Income Strategies BUSI 3460U
Chapter 7
1.
Suppose that the structure for an assetbacked security transaction is as
follows:
senior tranche $220 million
subordinate tranche 1 $50 million
subordinate tranche 2 $30 million
and that the
Version 1
Q1
Assume you buy a 5year, $10,000 par value bond with a 3.5%
annual coupon rate for $9,556.69. The bond is currently
yielding 4.5%. What is the coupon payment if the bond pays
interest semiannually?
(1 point)
10,000 x .035 = $350/2 = $175
Versi
BUSI3460U MidTerm Topics to Review
Financial Calculators allowed
1 page (double sided) Equation reference sheet allowed
Chapter 1
Basic features of a bond
Issuer types
Maturity (tenor) short term, intermediate, long term
Par Value
Coupon rate and frequenc
Bond G Sold for Settlement on June 16, 2104
Annual Coupon
Coupon Payment frequency
Interest Payment Dates
Maturity Date
Day-Count Convention
Annual Yield-to-Maturity
5%
Semiannual
10 April and 10 October
10 October 2016
30/360
4%
1. The full price that Bo