‫ سند الشركة هينزل النه مش مشجع لحدا يشتريه النه بالسوق اعلى فائدة(عالقة عكسية بين فائدة‬...

1000 ‫ والبار للسند قيمته‬%12 ‫ و السوق عارض‬%10 ‫الشركة عارضة‬

‫ سنين‬10‫ اخر ال‬1000 ‫ وهيرجعلك فعال‬1000 ‫ ولكن قيمته‬800 ‫ يعني اشتريه ب‬.. 800 ‫السوق وسعر السند ) لهيك راحت الشركة نزلت من سعر السند وصار ب‬
‫ إذا اشترى المالك السند واحتفظ به لمدة عام‬، ‫ الذي يتوقع المستثمر أن يكسبه‬B‫ اعلى من سعر السوق( العائد‬% 12.5 ‫رحت حسبت الكرنت ييلد وطلعت‬
‫ الفعلي الذي يحصل عليه المستثمر اذا كان لديه سند حتى االستحقاق) ما علينا منه‬B‫ الحالي ليس هو العائد‬B‫فالعائد‬..
‫ عرض الشركة اله انه يشتريه المالك‬800 ‫ اعلى من‬887 ‫ لهيك طلع‬%10 ‫ من سعر الشركة‬%12 ‫فحسبت سعر البوند لما كان العائد او سعر السوق اعلى‬
‫ لهيك سماه خطر النه زاد سعره على المالك الي هو شاري البوند‬%12 ‫ بحالة السوق لما كانت فائدته‬887 ‫ الزم تدفع‬1000 ‫يعني عشان تشتري البوند الي قيمته‬
800‫ سنين ولكن بهاي السنين او قبل م يصير االشي ويروح يدفع ال‬10‫ كل سنة على مدار ال‬100 ‫ بفائدة‬1000‫ عشان تاخد سند ال‬800‫ حكوله اشتري ب‬.. ‫يعني من االخر‬
‫ الي عرضتها الشركة واالخ شافها بالمجلة‬800‫ فشو هتدفع وقتها ؟؟؟ هيدفع اكتر من‬%12 ‫ زادت فائدة السوق وصارت‬..
1.
2. You have funds that you want to invest in bonds, and you just noticed in the financial pages
of the local newspaper that you can buy a $1,000 par value bond for $800. The coupon rate
is 10% (with annual payments), and there are 10 years before the bond will mature and pay
off its $1,000 par value. You should buy the bond if your required return on bonds with this
risk is 12%.
.Sol
Face value =1,000 Price=800 rcop.= 10% annual n = 10 rd = 12%

Value of bond
1000/(1+0.12)^10 +)) n^)1+0.12(*0.12(/) 10-1^) 1+0.12(((* 0.1*1000 =
321.97 + 565.022 =
886.992 =
= 887

2. Ranger Inc. would like to issue new 20-year bonds. Initially, the plan was to make the bonds
non-callable. If the bonds were made callable after 5 years at a 5% call premium, how would
this affect their required rate of return?
a. There is no reason to expect a change in the required rate of return.
b. The required rate of return would decline because the bond would then be less risky to a
bondholder.
c. The required rate of return would increase because the bond would then be more risky to
a bondholder.
d. It is impossible to say without more information.
e. Because of the call premium, the required rate of return would decline.

3. Which of the following bonds would have the greatest percentage increase in value if all
interest rates fall by 1%?
‫لو مفيش كوبون انترست فعليا هو اصال مش هيتأثر بأي انخفاض‬
a. 20-year, 10% coupon bond. ‫لهيك بضل علينا اخر خيارين‬
b. 20-year, 5% coupon bond. ‫فلو زادت السنين هتزيد فائدتي الي بربحها‬
‫لهيك هتكون هي الجواب الصحيح! بتحقيق اعلى نسبة قيمة للسند‬
c. 1-year, 10% coupon bond.
d. 20-year, zero coupon bond.
e. 10-year, zero coupon bond.

4. Which of the following statements is CORRECT?

a. A bond's current yield must always be either equal to its yield to maturity or between its
yield to maturity and its coupon rate.
b. If a bond sells at par, then its current yield will be less than its yield to maturity.
c. If a bond sells for less than par, then its yield to maturity is less than its coupon rate.
d. A discount bond's price declines each year until it matures, when its value equals its par
value.
e. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at
par while the other sells at a premium above par. The premium bond must have a lower
current yield and a higher capital gains yield than the par bond.

5. Assume that a 10-year Treasury bond has a 12% annual coupon, while a 15-year T-bond has
an 8% annual coupon. Assume also that the yield curve is flat, and all Treasury securities
have a 10% yield to maturity. Which of the following statements is CORRECT?
a. If interest rates decline, the prices of both bonds will increase, but the 10-year bond
would have a larger percentage increase in price. ‫ سنة هو الي بكون اعلى‬15 ‫النص االول صح بس البوند صاحب‬
b. The 10-year bond would sell at a discount, while the 15-year bond would sell at a
 premium.10y =12% > 10% YTM so it is premium 15y = 8% < 10% YTM it is discount
c. The 10-year bond would sell at a premium, while the 15-year bond would sell at par.
d. If the yield to maturity on both bonds remains at 10% over the next year, the price of the
10-year bond would increase, but the price of the 15-year bond would fall.
e. If interest rates decline, the prices of both bonds will increase, but the 15-year bond
would have a larger percentage increase in price.

6. Which of the following statements is CORRECT?

a. If their maturities and other characteristics were the same, a 5% coupon bond would have
more interest rate price risk than a 10% coupon bond.
b. A 10-year coupon bond would have more reinvestment rate risk than a 5-year coupon
bond, but all 10-year coupon bonds have the same amount of reinvestment rate risk.
c. A 10-year coupon bond would have more interest rate price risk than a 5-year coupon
bond, but all 10-year coupon bonds have the same amount of interest rate price risk.
d. If their maturities and other characteristics were the same, a 5% coupon bond would have
less interest rate price risk than a 10% coupon bond.
e. A zero coupon bond of any maturity will have more interest rate price risk than any
coupon bond, even a perpetuity.

7. Kessen Inc.'s bonds mature in 7 years, have a par value of $1,000, and make an annual
coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's
price?
a. $923.22
b. $946.30 = 70*(((1+0.085 )^7-1 )/(0.085*(1+0.085)^7 ))+ 1000/(1+0.085 )^7
c. $969.96 = 932.22

d. $994.21
e. $1,019.06

8. Rogoff Co.'s 15-year bonds have an annual coupon rate of 9.5%. Each bond has face value of
$1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to
maturity on this investment, what is the maximum price you should be willing to pay for the
bond?
n = 15*2 = 30 rd = 11%/2 = 5.5% r = 9.5%/2 = 4.75% INT = 0.0475*1000 = 47.5
a. $891.00
cop.
PV = 47.5*(((1+0.055 )^30-1 )/(0.055*(1+0.055)^30 ))+ 1000/(1+0.055 )^30
b. $913.27 = 890.996
= 891
c. $936.10
d. $959.51
e. $983.49

9. Haswell Enterprises' bonds have a 10-year maturity, a 6.25% semiannual coupon, and a par
value of $1,000. The going interest rate (rd) is 4.75%, based on semiannual compounding.
What is the bond's price?
a. 1,063.09 n = 10*2= 20 r = 6.25%/2 = 3.125%
cop. rd = 4.75%/2 = 2.375% INT=0.03125*1000 =31.25
b. 1,090.35 PV = 31.25*(((1+0.02375 )^20-1 )/(0.02375*(1+0.02375)^20 ))+ 1000/(1+0.02375 )^20
c. 1,118.31 = 1,118.311185
= 1,118.312
d. 1,146.27
e. 1,174.93