Professional Documents
Culture Documents
bonds is incorrect
3. What is the price of a 10-year, 8-percent, annual coupon bond when the market rate is 10
percent? The face value is $100.
a. $100
b. $100.57
c. $87.71
d. $113.42
4. Which of the following bond prices is most sensitive to market rate changes? The par value
is $100 for all.
a. 5-year, 5-percent coupon rate, yield 5.5 percent
b. 3-year, 8-percent coupon rate, yield 5.6 percent
c. 7.5-year, 4.5-percent coupon rate, yield 5.5 percent
d. 10-year, 4.5-percent coupon rate, yield 5.5 percent
5. What is the yield to maturity on an eight-year, 9-percent bond that pays interest semi-
annually, which is now priced at $980? Use a financial calculator.
a. 9.05 percent
b. 9 percent
c. 4.68 percent
d. 9.36 percent
8. What is the quoted price of a 182-day Canadian T-bill that has a face value of $10,000 and a
quoted yield of 4 percent?
a. $9,804.45
b. $9,478.67
c. $98.0445
d. $94.7867
10. Which statement is correct according to interest rate parity (IRP) theory?
a. IRP states that differences in interest rates between countries cannot be totally offset by
expected changes in exchange rates.
b. Forward exchange rates may be locked in today to eliminate foreign exchange risk and
ensure investors can profit from moving capital to countries with higher interest rates.
c. Inflation differentials between countries affect both interest rates and currency exchange
rates.
d. The country with a higher inflation rate will see its currency appreciate against another
country with a lower inflation rate.
ANSWER
https://solvedquest.com/1-which-of-the-following-statements-concerning-bonds-is-incorrect/