Bond Discounting MCQs
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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?
>> Read Bond Discounting.
Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt
Fundamentals of Financial Management: Concise Edition, Brigham Houston
The Economist Guide to Financial Management, John Tennet
Financial Management: Core Concepts, Raymond M Brooks