Bond Discounting MCQs


MCQs 1-10


1. Which of the following Debt is unsecured?

At issue, coupon bonds typically sell _________________?

The _____________________ is used to calculate the present value of a bond?

4. Mortgage bonds are secured by real property whose value is generally __________ than that of the value of the bonds issue?

5. Using semi-annual compounding, a 15-year zero coupon bond that has a par value of $ 1,000 and a required return of 8 % would be priced at approximately ________________?

6. Market price of the bond changes according to which of the following reasons?

7. A bond will sell at a discount when __________?

8. What is the value of 15 % Coupon Bond that has $1,000 Face Value and four years to Maturity that is priced to Yield 10%?

9. Which of the following statements is most correct?

10. Assume that you wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semi-annual interest payments of $40. If you require a 10 percent nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?


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