Question

Question 5 of 71

Which of the following investments have the highest yield to maturity (YTM)?

$1,000 face value 5-year, 5% annual coupon bond priced at 94

A 5-year annuity paying $240 annually (at year end)

$1,000 face value 9-year, 7% annual coupon bond priced at 104

$1,000 face value 9-year 7% annual coupon bond with a current yield of 6.667%

$1,000 face value 5-year 0-coupon bond (compounded annually) priced at 73 <--- I put this one.

Question 7 of 71

A large industrial business is considering issuing a $10m face value, 4-year 6% annual coupon bond with a 10% YTM. There is a 1% underwriting fee, calculated on the total face value of the bond, along with $50,000 in various legal, advisory and accounting fees. What is the company’s % all-in-cost (AIC)?

11.50%

10.52%

10.48%

10.32%

10.15%

Question 8 of 71

A bond has a 6% YTM. If market rates began to decline, what would you expect to happen to the bond price?

It would drop in price.

It would go up in price. <--- i put this one

It would go up as long as the bond is trading at a discount.

It would go down as long as the bond is trading at a discount.

There will not be a change in price.

Question 9 of 71

You own a fixed-rate bond that has a coupon rate of 4.5% and matures in 10 years. You purchased this bond at par value at time of issuance. If the current market rate for this type and quality of bond is 5.0%, then you would expect …

to realize a capital loss if you sold the bond at the market price today.

the yield to maturity to remain constant throughout the term of the bond.

the current yield today to be less than 4.5%.

today's market price to be higher than the face value of the bond.

to realize a capital gain if you sold the bond at the market price today.

Question 10 of 71

Apple 3% 10/12/2042 Notes

Price: 95.054 / 95.453

In the bond quote above, what is the bid price?

95.054

95.253

95.453

95.300

It is impossible to tell from the information provided.

Answer 1

Question 5 of 71

Which of the following investments have the highest yield to maturity (YTM)?

$1,000 face value 5-year 0-coupon bond (compounded annually) priced at 73

Question 7 of 71

A large industrial business is considering issuing a $10m face value, 4-year 6% annual coupon bond with a 10% YTM. There is a 1% underwriting fee, calculated on the total face value of the bond, along with $50,000 in various legal, advisory and accounting fees. What is the company’s % all-in-cost (AIC)?

11.50%

Question 8 of 71

A bond has a 6% YTM. If market rates began to decline, what would you expect to happen to the bond price?

It would go up in price.

Question 9 of 71

You own a fixed-rate bond that has a coupon rate of 4.5% and matures in 10 years. You purchased this bond at par value at time of issuance. If the current market rate for this type and quality of bond is 5.0%, then you would expect …

to realize a capital loss if you sold the bond at the market price today.

Question 10 of 71

Apple 3% 10/12/2042 Notes
Price: 95.054 / 95.453
In the bond quote above, what is the bid price?

95.453