C214 Chapter 6 Question and answers
already passed 2026
Which of the following is an unsecured loan? - correct answer ✔A credit card
A secured loan means that some type of asset is being used as collateral to back the loan. - correct
answer ✔True
Which of the following types of loans are classified as a secured loan? - correct answer ✔Car loan,
Mortgage
The stated interest rate on a bond is the: - correct answer ✔Coupon
What are affirmative covenants? - correct answer ✔Obligations a firm agrees to do
The rate of return investors receive on a bond is called the: - correct answer ✔Yield to maturity
A bond has the typical face value of $1,000 and promised to pay a 3.5% coupon rate. How much is the
annual coupon payment? - correct answer ✔$35.00
You are thinking of investing in a semi-annual bond that has a face value of $1,000 and offers a coupon
rate of 2.5%. How much would your semi-annual coupon payment be? - correct answer ✔$12.50
Calculate the value of a bond that matures in 15 years and has a $1,000 face value. The coupon rate is 9
percent and the investor's required rate of return is 11 percent. Assume annual compounding. - correct
answer ✔$856.18
, Risky, Inc. bonds have a 12 percent coupon rate. The interest rate is paid semiannually and the bonds
mature in 6 years. The bonds have a par value of $1,000. If your required rate of return is 7 percent,
what is the value of the bond? - correct answer ✔$1,241.58
Acme Enterprises 20-year, $1,000 par value bonds pay 10 percent interest annually. The market price of
the bonds is $1,050, and your required rate of return is 10 percent. Determine the value of the bond to
you, given your required rate of return. Should you purchase this bond? - correct answer ✔$1,000, no
do not buy the bond because it's overpriced
What is the value of a bond? - correct answer ✔The present value of its cash flows
Trampoline Inc. wants to expand their business. They will issue bonds to fund their expansion. If current
required rate of return for investors is 11%, what should the price be for their bonds with a $1000 face
value, 15 years to maturity, and a coupon rate of 10.5% paid semi-annually? - correct answer
✔$963.67
Johnny Jims Corporation is issuing new bonds. They will pay a semi-annual coupon and mature in 15
years. They are currently selling for $800.00, the annual coupon rate is 8%. What is the yield to maturity
on Johnny Jims' bonds? (Assume a $1,000 face value). - correct answer ✔10.7%
North Rim bonds are being issued at a market price of $1000. They have a face value of $1000 and have
a coupon rate of 9% that is paid monthly. These bonds mature in 8 years. What is the YTM? - correct
answer ✔9.0%
You are considering investing in a bond that has a 12% coupon rate, 10 years to maturity, and is priced
at $900. What would be your YTM if you received your coupon payments quarterly? (Assume a $1,000
face value). - correct answer ✔13.9%
What is the return on a $1000 face value bond that pays annual coupon payments of $75, matures in 4
years, and is currently selling at $850? - correct answer ✔12.49%
already passed 2026
Which of the following is an unsecured loan? - correct answer ✔A credit card
A secured loan means that some type of asset is being used as collateral to back the loan. - correct
answer ✔True
Which of the following types of loans are classified as a secured loan? - correct answer ✔Car loan,
Mortgage
The stated interest rate on a bond is the: - correct answer ✔Coupon
What are affirmative covenants? - correct answer ✔Obligations a firm agrees to do
The rate of return investors receive on a bond is called the: - correct answer ✔Yield to maturity
A bond has the typical face value of $1,000 and promised to pay a 3.5% coupon rate. How much is the
annual coupon payment? - correct answer ✔$35.00
You are thinking of investing in a semi-annual bond that has a face value of $1,000 and offers a coupon
rate of 2.5%. How much would your semi-annual coupon payment be? - correct answer ✔$12.50
Calculate the value of a bond that matures in 15 years and has a $1,000 face value. The coupon rate is 9
percent and the investor's required rate of return is 11 percent. Assume annual compounding. - correct
answer ✔$856.18
, Risky, Inc. bonds have a 12 percent coupon rate. The interest rate is paid semiannually and the bonds
mature in 6 years. The bonds have a par value of $1,000. If your required rate of return is 7 percent,
what is the value of the bond? - correct answer ✔$1,241.58
Acme Enterprises 20-year, $1,000 par value bonds pay 10 percent interest annually. The market price of
the bonds is $1,050, and your required rate of return is 10 percent. Determine the value of the bond to
you, given your required rate of return. Should you purchase this bond? - correct answer ✔$1,000, no
do not buy the bond because it's overpriced
What is the value of a bond? - correct answer ✔The present value of its cash flows
Trampoline Inc. wants to expand their business. They will issue bonds to fund their expansion. If current
required rate of return for investors is 11%, what should the price be for their bonds with a $1000 face
value, 15 years to maturity, and a coupon rate of 10.5% paid semi-annually? - correct answer
✔$963.67
Johnny Jims Corporation is issuing new bonds. They will pay a semi-annual coupon and mature in 15
years. They are currently selling for $800.00, the annual coupon rate is 8%. What is the yield to maturity
on Johnny Jims' bonds? (Assume a $1,000 face value). - correct answer ✔10.7%
North Rim bonds are being issued at a market price of $1000. They have a face value of $1000 and have
a coupon rate of 9% that is paid monthly. These bonds mature in 8 years. What is the YTM? - correct
answer ✔9.0%
You are considering investing in a bond that has a 12% coupon rate, 10 years to maturity, and is priced
at $900. What would be your YTM if you received your coupon payments quarterly? (Assume a $1,000
face value). - correct answer ✔13.9%
What is the return on a $1000 face value bond that pays annual coupon payments of $75, matures in 4
years, and is currently selling at $850? - correct answer ✔12.49%
