INV2601 Assessment 2 s2 2024 (625220) 100%

Assessment 2: Attempt review 12/09/2024, 10:11




INV2601-24-S2  INV2601 Welcome Message  Assessment 2

QUIZ




Started on Thursday, 12 September 2024, 9:58 AM
State Finished
Completed on Thursday, 12 September 2024, 11:10 AM
Time taken 1 hour 11 mins
Marks 20.00/20.00
Grade 100.00 out of 100.00


Question 1
Which bond risk exposure entails the possibility that the issuer will fail to meet its
Correct
obligations regarding the timely payment of coupons and principal?
Mark 1.00 out of
1.00


a. Credit spread risk



b. Default risk 



c. Downgrade risk



d. Interest risk




Your answer is correct.
The correct answer is:


Default risk




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, Assessment 2: Attempt review 12/09/2024, 10:11



Question 2
A zero coupon bond has a par value of R1 000 with a maturity of 20 years and a yield
Correct
to maturity of 8% compounded semi-annually. Calculate the present value of the
Mark 1.00 out of bond.
1.00




a.
R214.55



b.
R208.29 



c.
R456.39



d.
R1 000.00




Your answer is correct.
The correct answer is:


R208.29




Question 3
A/An .......... yield curve is one in which the yields on intermediate-term issues are
Correct
above the yields on short-term issues and the rates on long-term issues decline to
Mark 1.00 out of levels below those for the short-term issues before leveling out.
1.00




a. upward sloping

b. downward sloping

c. [at

d. humped 




Your answer is correct.
The correct answer is:
humped




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