FIN 351 CHAPTER 12 QUIZ 31 TO 35

FIN 351  CHAPTER 12  QUIZ 31 TO 35
31. The value of a bond at any given time is the sum of
A. The future interest payments and the par value
B. The present value of future interest payments and the present value of the par value
C. The future value of the interest payments and the future value of the par value
D. The present value of future interest payments and the market value
E. The present value of future interest payments and the future value of the par value
32. What is the price of a $1,000 perpetual par bond with a coupon rate of 10 percent and a current yield of 8 percent?
A. $1,000
B. $800
C. $920
D. $1,250
E. $925.93
33. The total return an investor would receive from income plus capital appreciation assuming a bond is held to maturity is called the
A. Call premium
B. Current yield
C. Yield to maturity
D. Capital gains yield
E. More than one of the above
34. What formula measure would an investor use to calculate the yield on a 20-year bond with 10 years to maturity, if he or she only intends
to hold the bond for 5 years?
A. Anticipated realized yield
B. Yield to call
C. Current yield
D. Yield to maturity
E. Any one of the above will measure the yield
35. When should an investor calculate both yield to maturity and yield to call?
A. Whenever there is a call provision
B. When the sum of the present values of the interest payments exceeds the call price
C. When the market price is greater than or equal to the call price
D. Whenever the funds can be reinvested
E. When interest rates increase above the coupon rate