Question: 2 5 9 3 4 5 6 7 Problem 1 Answer 8 10 11 12 1. A portfolio manager is considering the purchase of a

2 5 9 3 4 5 6 7 Problem 1 Answer 8 10 11 12 1. A portfolio manager is considering the purchase of a bond with a 5.5% coupon rate that pays interest annually and matures in three years. If the required rate of return on the bond is 5%, the price of the bond per 100 of par value is closest to: A. 98.65. B. 101.36. C. 106.43. 2. Bond dealers most often quote the: A. flat price. B. full price. C. full price plus accrued interest. 3. A 365-day year bank certificate of deposit has an initial principal amount of USD 96.5 million and a redemption amount due at maturity of USD 100 million. The number of days between settlement and maturity is 350. The bond equivalent yield is closest to: A. 3.48%. B. 3.65%. C. 3.78% 2 5 9 3 4 5 6 7 Problem 1 Answer 8 10 11 12 1. A portfolio manager is considering the purchase of a bond with a 5.5% coupon rate that pays interest annually and matures in three years. If the required rate of return on the bond is 5%, the price of the bond per 100 of par value is closest to: A. 98.65. B. 101.36. C. 106.43. 2. Bond dealers most often quote the: A. flat price. B. full price. C. full price plus accrued interest. 3. A 365-day year bank certificate of deposit has an initial principal amount of USD 96.5 million and a redemption amount due at maturity of USD 100 million. The number of days between settlement and maturity is 350. The bond equivalent yield is closest to: A. 3.48%. B. 3.65%. C. 3.78%

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