FINC 332 Ch 7 Optionals | UPDATED Questions with 100% Verified
Answers
Question:
Q: A bond's coupon rate is equal to the annual interest divided
by which of the following?
Answer:
A: Face Value
Question:
Q: Currently, the bond market requires a return of 11.6
percent is referred to which one of the following?
Answer:
A: Yield to maturity
Question:
Q: An indenture is:
Answer:
A: the legal agreement between the bond issuer and the
bondholders
Question:
Q: A bond that is payable to whomever has physical
possession of the bond is said to be in:
Answer:
A: bearer form
Question:
Q: A bond that can be paid off early at the issuer's discretion
is referred to as being which one of the following?
Answer:
A: callable
, Question:
Q: The items included in an indenture that limit certain
actions of the issuer in order to protect bondholder's interests
are referred to as the:
Answer:
A: protective covenants
Question:
Q: The difference between the price that a dealer is willing to
pay and the price at which he or she will sell is called the:
Answer:
A: spread
Question:
Q: The interest rate risk premium is the:
Answer:
A: compensation investors demand for accepting interest rate
risk
Question:
Q: The liquidity premium is compensation to investors for:
Answer:
A: the lack of an active market wherein a bond can be sold for
its actual value
Question:
Q: A bond has a market price that exceeds its face value.
Which of the following features currently apply to this bond?
Answer:
A: II. Premium price and IV. yield-to-maturity that is less
than the coupon rate
Answers
Question:
Q: A bond's coupon rate is equal to the annual interest divided
by which of the following?
Answer:
A: Face Value
Question:
Q: Currently, the bond market requires a return of 11.6
percent is referred to which one of the following?
Answer:
A: Yield to maturity
Question:
Q: An indenture is:
Answer:
A: the legal agreement between the bond issuer and the
bondholders
Question:
Q: A bond that is payable to whomever has physical
possession of the bond is said to be in:
Answer:
A: bearer form
Question:
Q: A bond that can be paid off early at the issuer's discretion
is referred to as being which one of the following?
Answer:
A: callable
, Question:
Q: The items included in an indenture that limit certain
actions of the issuer in order to protect bondholder's interests
are referred to as the:
Answer:
A: protective covenants
Question:
Q: The difference between the price that a dealer is willing to
pay and the price at which he or she will sell is called the:
Answer:
A: spread
Question:
Q: The interest rate risk premium is the:
Answer:
A: compensation investors demand for accepting interest rate
risk
Question:
Q: The liquidity premium is compensation to investors for:
Answer:
A: the lack of an active market wherein a bond can be sold for
its actual value
Question:
Q: A bond has a market price that exceeds its face value.
Which of the following features currently apply to this bond?
Answer:
A: II. Premium price and IV. yield-to-maturity that is less
than the coupon rate
