Question 1 of 71

The yield to maturity on a coupon bond is

always greater than the coupon rate.

the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the current yield.

the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity.

only equal to the internal rate of return of a bond when the bond is priced at par.

greater than both the current yield and coupon rate when the bond is priced at a premium to par.

Question 2 of 71

A bond priced at discount to par will have a current yield that

is greater than the YTM but less than the coupon rate.

is greater than both the YTM and coupon rate.

is less than the YTM but greater than the coupon rate.

Is equal to the coupon rate.

is less than both the YTM and coupon rate.

Question 3 of 71

The bonds issued by The South Foot bear a coupon rate of 7.5 percent, payable semiannually. The bonds mature in 6.5 years, sell at par, and have a $1,000 face value. What is the yield to maturity?

7.59%

7.86%

7.50%

7.42%

15.00%

Question 4 of 71

What is the yield to maturity of a 5-year, 6% annual coupon bond priced at 98?

6.00%

5.522%

6.481%

6.475%

6.122%

Question 5 of 71

Which of the following investments have the highest yield to maturity (YTM)?

$1,000 face value 5-year, 5% annual coupon bond priced at 94

A 5-year annuity paying $240 annually (at year end)

$1,000 face value 9-year, 7% annual coupon bond priced at 104

$1,000 face value 9-year 7% annual coupon bond with a current yield of 6.667%

$1,000 face value 5-year 0-coupon bond (compounded annually) priced at 73

Question 6 of 71

I am considering investing in a 3-year 6% annual coupon bond. What price will provide me with a 10% YTM?

87.57

90.00

90.05

90.91

93.06

Question 7 of 71

A large industrial business is considering issuing a $10m face value, 4-year 6% annual coupon bond with a 10% YTM. There is a 1% underwriting fee, calculated on the total face value of the bond, along with $50,000 in various legal, advisory and accounting fees. What is the companys % all-in-cost (AIC)?

11.50%

10.52%

10.48%

10.32%

10.15%

Question 8 of 71

A bond has a 6% YTM. If market rates began to decline, what would you expect to happen to the bond price?

It would drop in price.

It would go up in price.

It would go up as long as the bond is trading at a discount.

It would go down as long as the bond is trading at a discount.

There will not be a change in price.

Question 9 of 71

You own a fixed-rate bond that has a coupon rate of 4.5% and matures in 10 years. You purchased this bond at par value at time of issuance. If the current market rate for this type and quality of bond is 5.0%, then you would expect

to realize a capital loss if you sold the bond at the market price today.

the yield to maturity to remain constant throughout the term of the bond.

the current yield today to be less than 4.5%.

today's market price to be higher than the face value of the bond.

to realize a capital gain if you sold the bond at the market price today.

Question 10 of 71

Apple 3% 10/12/2042 Notes

Price: 95.054 / 95.453

In the bond quote above, what is the bid price?

95.054

95.253

95.453

95.300

It is impossible to tell from the information provided.