FIN 362 Week 4 Quiz | Assignment Help | Mercer University
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- 12 Sep 2020
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FIN 362 Week 4 Quiz | Assignment Help | Mercer University
FIN 362 HWK 4 chap 7
Question 1
Allison just received
her semiannual payment of $35 on a bond she owns. Which term refers to this
payment?
o
Discount.
o
Call premium.
o
Yield.
o
Face value.
o
Coupon.
Question 2
Bert owns a bond that
will pay him $75 each year in interest plus a $1,000 principal payment at maturity.
What is the $1,000 called?
o
Coupon.
o
Face value.
o
Dirty price.
o
Discount.
o
Yield.
Question 3
A bond's coupon rate is
equal to the annual interest divided by which one of the following?
o
Face value.
o
Call price.
o
Clean price.
o
Dirty price.
o
Current price.
Question 4
The bond principal is
repaid on which one of these dates?
o
Clean date.
o
Coupon date.
o
Yield date.
o
Maturity date.
o
Dirty date.
Question 5
The bond market
requires a return of 9.8 percent on the five-year bonds issued by JW
Industries. The 9.8 percent is referred to as which one of the following?
o
Yield to maturity.
o
Face rate.
o
Current yield.
o
Call rate.
o
Coupon rate.
Question 6
The current yield is
defined as the annual interest on a bond divided by which one of the following?
o
Face value.
o
Coupon rate.
o
Call price.
o
Market price.
o
Par value.
Question 7
Which one of these is
most apt to be included in a bond’s indenture one year after the bond has been
issued?
o
List of collateral used as bond
security.
o
Price at which a bondholder can resell
the bond to another bondholder
o
Current market price.
o
Current yield.
o
Written record of all the current bond
holders. .
Question 8
Road Hazards has
12-year bonds outstanding. The interest payments on these bonds are sent
directly to each of the individual bondholders. These direct payments are a
clear indication that the bonds can accurately be defined as being issued:
o
As debentures.
o
At par.
o
In registered form.
o
In street form.
o
As callable bonds.
Question 9
A bond that is payable
to whomever has physical possession of the bond is said to be in:
o
Registered form.
o
Debenture status.
o
Collateral status.
o
New-issue condition.
o
Bearer form.
Question 10
Jason’s Paints just
issued 20-year, 7.25 percent, unsecured bonds at par. These bonds fit the
definition of which one of the following terms?
o
Debenture.
o
Note.
o
Discounted.
o
Callable.
o
Zero-coupon.
Question 11
A note is generally
defined as:
o
Any bond maturing in 10 years or more.
o
Any bond secured by a blanket mortgage.
o
An unsecured bond with an initial
maturity of 10 years or less.
o
A secured bond with an initial maturity
of 10 years or more.
o
A secured bond that initially matures in
less than 10 years.
Question 12
A sinking fund is
managed by a trustee for which one of the following purposes?
o
Converting bonds into equity securities.
o
Early bond redemption.
o
Reducing bond coupon rates.
o
Paying preferred dividends. .
o
Paying bond interest payments.
Question 13
The 7 percent bonds
issued by Modern Kitchens pay interest semiannually, mature in eight years, and
have a $1,000 face value. Currently, the bonds sell for $1,032. What is the
yield to maturity?
o
6.92 percent
o
6.48 percent
o
6.87 percent
o
7.20 percent
o
6.08 percent
Question 14
Oil Wells offers 6.5
percent coupon bonds with semiannual payments and a yield to maturity of 6.94
percent. The bonds mature in seven years. What is the market price per bond if
the face value is $1,000?
o
$913.48
o
$902.60
o
$989.70
o
$975.93
o
$996.48
Question 15
Redesigned Computers
has 6.5 percent coupon bonds outstanding with a current market price of $742.
The yield to maturity is 13.2 percent and the face value is $1,000. Interest is
paid annually. How many years is it until these bonds mature?
o
6.16 years
o
4.19 years
o
8.32 years
o
7.41 years
o
5.73 years
Question 16
You are purchasing a
20-year, zero-coupon bond. The yield to maturity is 8.68 percent and the face
value is $1,000. What is the current market price?
o
$182.80
o
$108.18
o
$221.50
o
$228.47
o
$106.67
Question 17
Today, you want to sell
a $1,000 face value zero coupon bond you currently own. The bond matures in 3.5
years. How much will you receive for your bond if the market yield to maturity
is currently 6.19 percent? Ignore any accrued interest.
o
$896.60
o
$741.08
o
$756.14
o
$807.86
o
$798.09
Question 18
The zero coupon bonds
of JK Industries have a market price of $211.16, a face value of $1,000, and a
yield to maturity of 7.39 percent. How many years is it until these bonds
mature?
o
22.28 years
o
44.01 years
o
21.43 years
o
46.59 years
o
23.92 years
Question 19
A 13-year, 6 percent
coupon bond pays interest semiannually. The bond has a face value of $1,000.
What is the percentage change in the price of this bond if the market yield to
maturity rises to 5.7 percent from the current rate of 5.5 percent?
o
1.percent decrease
o
1.79 percent decrease
o
1.79 percent increase
o
1.97 percent increase
o
1.6 percent decrease
Question 20
Do-Well bonds have a
face value of $1,000 and are currently quoted at 86.725. The bonds have a 7
percent coupon rate. What is the current yield on these bonds?
o
8.47 percent
o
7.42 percent
o
8.07 percent
o
7.67 percent
o
9.03 percent
Question 21
The 7 percent,
semiannual coupon bonds offered by House Renovators are callable in two years
at $1,054. What is the amount of the call premium on a $1,000 par value bond?
o
$52
o
$84
o
$54
o
$89
o
$72
Question 22
A bond has a yield to
maturity of 11.68 percent. If the inflation rate is 3.2 percent, what is the
real rate of return on the bond?
o
15.04 percent
o
15.90 percent
o
9.19 percent
o
8.22 percent
o
8.86 percent
Question 23
The outstanding bonds
of Winter Tires Inc. provide a real rate of return of 5.6 percent. If the
current rate of inflation is 4.68 percent, what is the actual nominal rate of
return on these bonds?
o
9.33 percent
o
10.54 percent
o
8.58 percent
o
9.71 percent
o
9.76 percent
Question 24
Kaiser Industries has
bonds on the market making annual payments, with 14 years to maturity, a par
value of $1,000, and selling for $1,382.01. At this price, the bonds yield 7.5
percent. What is the coupon rate?
o
8.50 percent
o
9.00 percent
o
12.00 percent
o
8.00 percent
o
10.50 percent
Question 25
Dexter Mills issued
20-year bonds a year ago at a coupon rate of 10.2 percent. The bonds make
semiannual payments and have a par value of $1,000. If the YTM on these bonds
is 9.2 percent, what is the current bond price?
o
$1,089.02
o
$1,042.16
o
$991.90
o
$1,098.00
o
$985.55
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