Q1.
X purchased a bond a year ago, for Rs. 10,000. On this bond, he received an interest of Rs. 1,100. The current market price of the bond is Rs. 10,100. What is X’s one-period return?
Q2.
(I) If the coupon rate is higher than the required return on the bond, the bond will sell at a discount.
(II) If the coupon rate is lower than the required return on a bond, the bond will sell at a premium.
Q3.
If a 6% coupon bond with a face value of Rs. 1000 which is selling at Rs. 900. What would be the current yield?
Q4.
The yield to maturity of a bond is the discount rate that equates the present value of a bond’s cash-flows to the bond’s current market price.
Q5.
The actual yield realized by the investor in a bond, over a given holding period is called _________.
Q7.
(I) Realized yield is also called total return from a bond.
(II) Yield spreads are also called risk-premiums.
Q8.
(I) A rise in bond price will increase the yield.
(II) A bond is valued by discounting the future cash-flows.
Q9.
X purchased a bond a year ago, for Rs. 10,000. On this bond, he received an interest of Rs. 1,100. The current market price of the bond is Rs. 9,800. What would be the X’s one-period return?
Q10.
If a bond’s face value is Rs. 10,000, coupon rate is 8.75% & pending tenure is 4 yrs. The current rate of Discount is 9%. What would be the value of the bond?
Q11.
(I) Higher the coupon, higher the price sensitivity.
(II) Higher the YTM, lower is the price sensitivity.
Q12.
Higher the term to maturity of the bond, greater the price sensitivity.
|