CORPORATE FINANCE FINAL STUDY
GUIDE LATEST 2026 REAL EXAM 135
QUESTIONS AND CORRECT
ANSWERS|AGRADE (BRAND NEW!!)
Otto Enterprises has a bond issue outstanding with a coupon of 8 percent that
matures in 15 years. The bond is currently priced at $923.60 and has a par value of
$1,000. Interest is paid semiannually. What is the yield to maturity? - CORRECT
ANSWER ✔✔- 8.93 percent
Aivree is buying a $1,000 face value bond at a quoted price of 99.486. The bond
carries a coupon rate of 5.6 percent, with interest paid semiannually. The next
interest payment is four months from today. What is the clean price of this bond? -
CORRECT ANSWER ✔✔- $994.86
Rosina purchased one 15-year bond at par value when it was initially issued. This
bond has a coupon rate of 7 percent and matures 13 years from now. If the current
market rate for this type and quality of bond is 7.5 percent, then Rosina should
expect: - CORRECT ANSWER ✔✔- To realize a capital loss if she sold the bond
at today's market price
Moon Lite Cafe has a semiannual, 5 percent coupon bond with a current market
price of $988.52. The bond has a par value of $1,000 and a yield to maturity of
5.68 percent. How many years is it until this bond matures? - CORRECT
ANSWER ✔✔- 1.8 years
A bond that makes no coupon payments and is initially priced at a deep discount is
called a ___ bond. - CORRECT ANSWER ✔✔- Zero-coupon
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,The total price you pay to purchase a premium bond is referred to as the: -
CORRECT ANSWER ✔✔- Dirty price or the full price
Guggenheim offers a bond with annual payments and a coupon rate of 5 percent.
The yield to maturity is 5.62 and the maturity date is 9 years away. What is the
market price of one $1,000 face value bond? - CORRECT ANSWER ✔✔- $957.12
A bond with a face value of $1,000 that sells for $1,000 in the market is called a
_____ bond. - CORRECT ANSWER ✔✔- Par value
TJ's offers a $1,000 face value, zero coupon bond with a yield to maturity of 11.3
percent, given annual compounding. The bond matures in 16 years. What is the
current price? - CORRECT ANSWER ✔✔- $180.33
Which one of these combinations of bond ratings represents a crossover situation?
- CORRECT ANSWER ✔✔- Baa; BB
The specified date on which the principal amount of a bond is repaid is called the
bond's: - CORRECT ANSWER ✔✔- Maturity
A corporate bond has a coupon of 7.5 percent and pays interest annually. The face
value is $1,000 and the current market price is $1,108.15. The bond matures in 14
years. What is the yield to maturity? - CORRECT ANSWER ✔✔- 6.31 percent
All else constant, a bond will sell at ___ when the yield to maturity is ____ the
coupon rate. - CORRECT ANSWER ✔✔- A discount; greater than
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, Mason's has 5-year, 8 percent annual coupon bonds outstanding with a par value of
$1,000. Dixon's has 10-year, 8 percent annual coupon bonds outstanding with a par
value of $1,000. Both bonds currently have a yield to maturity of 8 percent. Which
one of the following statements is correct if the market rate decreases to 7 percent?
- CORRECT ANSWER ✔✔- Mason's bond will increase in value by $41
The stated interest payment, in dollars, made on a bond each period is called the
bond's: - CORRECT ANSWER ✔✔- Coupon
The ___ premium is that portion of the bond yield that represents compensation for
potential difficulties that might be encountered should the bond holder wish to sell
the bond prior to maturity - CORRECT ANSWER ✔✔- Liquidity
The rate of return required by investors in the market for owning a bond is called
the: - CORRECT ANSWER ✔✔- Yield to Maturity
The dirty price of a bond is defined as the: - CORRECT ANSWER ✔✔- Quoted
price plus the accrued interest
A $1,000 face value coupon bond will pay 5 percent interest annually for 12 years.
What is the percentage change in the price of this bond if the market yield rises to
6 percent from the current level of 5.5 percent? - CORRECT ANSWER ✔✔- -4.26
percent
An upward-sloping term structure of interest rates indicates that: - CORRECT
ANSWER ✔✔- Longer-term rates are higher than shorter-term rates
A corporate bond with a face value of $1,000 matures in 4 years and has a coupon
rate of 6.25 percent. The current price of the bond is $932 and interest is paid
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GUIDE LATEST 2026 REAL EXAM 135
QUESTIONS AND CORRECT
ANSWERS|AGRADE (BRAND NEW!!)
Otto Enterprises has a bond issue outstanding with a coupon of 8 percent that
matures in 15 years. The bond is currently priced at $923.60 and has a par value of
$1,000. Interest is paid semiannually. What is the yield to maturity? - CORRECT
ANSWER ✔✔- 8.93 percent
Aivree is buying a $1,000 face value bond at a quoted price of 99.486. The bond
carries a coupon rate of 5.6 percent, with interest paid semiannually. The next
interest payment is four months from today. What is the clean price of this bond? -
CORRECT ANSWER ✔✔- $994.86
Rosina purchased one 15-year bond at par value when it was initially issued. This
bond has a coupon rate of 7 percent and matures 13 years from now. If the current
market rate for this type and quality of bond is 7.5 percent, then Rosina should
expect: - CORRECT ANSWER ✔✔- To realize a capital loss if she sold the bond
at today's market price
Moon Lite Cafe has a semiannual, 5 percent coupon bond with a current market
price of $988.52. The bond has a par value of $1,000 and a yield to maturity of
5.68 percent. How many years is it until this bond matures? - CORRECT
ANSWER ✔✔- 1.8 years
A bond that makes no coupon payments and is initially priced at a deep discount is
called a ___ bond. - CORRECT ANSWER ✔✔- Zero-coupon
1|Page
,The total price you pay to purchase a premium bond is referred to as the: -
CORRECT ANSWER ✔✔- Dirty price or the full price
Guggenheim offers a bond with annual payments and a coupon rate of 5 percent.
The yield to maturity is 5.62 and the maturity date is 9 years away. What is the
market price of one $1,000 face value bond? - CORRECT ANSWER ✔✔- $957.12
A bond with a face value of $1,000 that sells for $1,000 in the market is called a
_____ bond. - CORRECT ANSWER ✔✔- Par value
TJ's offers a $1,000 face value, zero coupon bond with a yield to maturity of 11.3
percent, given annual compounding. The bond matures in 16 years. What is the
current price? - CORRECT ANSWER ✔✔- $180.33
Which one of these combinations of bond ratings represents a crossover situation?
- CORRECT ANSWER ✔✔- Baa; BB
The specified date on which the principal amount of a bond is repaid is called the
bond's: - CORRECT ANSWER ✔✔- Maturity
A corporate bond has a coupon of 7.5 percent and pays interest annually. The face
value is $1,000 and the current market price is $1,108.15. The bond matures in 14
years. What is the yield to maturity? - CORRECT ANSWER ✔✔- 6.31 percent
All else constant, a bond will sell at ___ when the yield to maturity is ____ the
coupon rate. - CORRECT ANSWER ✔✔- A discount; greater than
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, Mason's has 5-year, 8 percent annual coupon bonds outstanding with a par value of
$1,000. Dixon's has 10-year, 8 percent annual coupon bonds outstanding with a par
value of $1,000. Both bonds currently have a yield to maturity of 8 percent. Which
one of the following statements is correct if the market rate decreases to 7 percent?
- CORRECT ANSWER ✔✔- Mason's bond will increase in value by $41
The stated interest payment, in dollars, made on a bond each period is called the
bond's: - CORRECT ANSWER ✔✔- Coupon
The ___ premium is that portion of the bond yield that represents compensation for
potential difficulties that might be encountered should the bond holder wish to sell
the bond prior to maturity - CORRECT ANSWER ✔✔- Liquidity
The rate of return required by investors in the market for owning a bond is called
the: - CORRECT ANSWER ✔✔- Yield to Maturity
The dirty price of a bond is defined as the: - CORRECT ANSWER ✔✔- Quoted
price plus the accrued interest
A $1,000 face value coupon bond will pay 5 percent interest annually for 12 years.
What is the percentage change in the price of this bond if the market yield rises to
6 percent from the current level of 5.5 percent? - CORRECT ANSWER ✔✔- -4.26
percent
An upward-sloping term structure of interest rates indicates that: - CORRECT
ANSWER ✔✔- Longer-term rates are higher than shorter-term rates
A corporate bond with a face value of $1,000 matures in 4 years and has a coupon
rate of 6.25 percent. The current price of the bond is $932 and interest is paid
3|Page
