5 Topic 5 Quiz

Due Oct 10 at 11:59pm Points 10 Questions 10 Time Limit None

Attempt History
Attempt Time Score
LATEST Attempt 1 197 minutes 9 out of 10

Score for this quiz: 9 out of 10

Submitted Oct 10 at 2:27pm
This attempt took 197 minutes.

Question 1 1 / 1 pts

The yield to maturity will be greater than the coupon rate when a bond is selling at a premium.

True

Correct!
False

Question 2 1 / 1 pts

Bond prices are inversely related to market interest rates.

Correct!
True

False

Question 3 1 / 1 pts

A bond selling at a premium sells for more than its face value.

Correct!
True

False

Question 4 1 / 1 pts

A callable bond can not be repurchased by the issuer prior to the initial maturity date.

True

Correct!
False

Question 5 0 / 1 pts

Any regular coupon bond of any maturity will sell for below its face value if the coupon rate is the same as the market rate of interest.

You Answered True

Correct Answer False

Question 6 1 / 1 pts
 A zero coupon bond is initially sold at a deep discount.

Correct! True

False

Question 7 1 / 1 pts

The market price of a bond is equal to the present value of the face value plus the present value of the coupon payments.

Correct! True

False

Question 8 1 / 1 pts

A bond with a 7% coupon that pays interest semi-annually and is priced at par will have a market price of _____ and interest payments in the
amount of _____ each.

$1,070; $70

$1,070; $35

$1,007; $70

Correct! $1,000; $35

Question 9 1 / 1 pts

The bonds of Microhard, Inc. carry a 10% annual coupon, have a $1,000 face value, and mature in four years. Bonds of equivalent risk yield 7%.
What is the market value of Microhard's bonds?

Correct! $1,101.62

$1,087.25

$1,095.66

$1,011.20

Question 10 1 / 1 pts

Calculate the nominal rate of interest given a real rate of 8% and an inflation rate of 2%.

Correct! 10.16%

10.75%

10.01%

10.48%

Quiz Score: 9 out of 10