1. A bond's call feature may be exercised if

1. the yield to maturity exceeds the current yield 2. the yield to maturity is less than the current yield 3. interest rates have risen 4. interest rates have fallen

Select one:

a. 1 and 3

b. 1 and 4

c. 2 and 3

d. 2 and 4

2. The concept of duration considers

Select one:

a. the timing of interest payments

b. the timing of principal repayment

c. the current rate of interest

d. the timing of both interest and principal repayment

3. A legal document which is administered by an independent trustee and spells out the major provisions of a bond agreement is called the ________.

Select one:

a. bond contract.

b. bond indenture.

c. bond debenture.

d. bond subordination.

e. bond current yield.

4. If a bond is selling for a premium,

Select one:

a. the yield to maturity exceeds the current yield

b. the current yield exceeds the yield to maturity

c. the current yield has risen

d. the bond cannot be called

5. Greshak Corp. currently has bonds outstanding that trade for $1,080.60 in the market. Each bond has a $1,000 par value, an annual coupon rate of 8.50% (paid semiannually), and have 18 years remaining to maturity. In the market, this bond currently has a 7.70% nominal yield to maturity, but it can be called in 6 years at a price of $1,060. What is the bond's EXACT Yield to Call (YTC)?

Select one:

a. 7.61%

b. 3.80%

c. 4.26%

d. 10.60%

e. 8.52%