投资学第7版Test-Bank答案

投资学第7版Test-Bank 答案 八年级地理上册填图题岩土工程勘察试题省略号的作用及举例应急救援安全知识车间5s试题及答案 投资学第7版Test-Bank答案PAGE投资学第7版Test-Bank答案MultipleChoiceQuestions1.Thecurrentyieldonabondisequalto________.A)annualinterestdividedbythecurrentmarketpriceB)theyieldtomaturityC)annualinterestdividedbytheparvalueD)theinternalrateofreturnE)noneoftheaboveAnswer:ADifficulty:EasyRationale:Aiscurrentyieldandisquotedassuchinthefinancialpress.2.Ifa7%couponbondistradingfor$,ithasacurrentyieldof____________percent.A)B)C)D)E)Answer:EDifficulty:EasyRationale:70/975=.3.Ifa6%couponbondistradingfor$,ithasacurrentyieldof____________percent.A)B)C)D)E)Answer:BDifficulty:EasyRationale:60/950=.4.Ifan8%couponbondistradingfor$,ithasacurrentyieldof____________percent.A)B)C)D)E)Answer:ADifficulty:EasyRationale:80/1025=.5.Ifa%couponbondistradingfor$,ithasacurrentyieldof____________percent.A)B)C)D)E)Answer:CDifficulty:EasyRationale:75/1050=.6.Acouponbondpaysannualinterest,hasaparvalueof$1,000,maturesin4years,hasacouponrateof10%,andhasayieldtomaturityof12%.Thecurrentyieldonthisbondis___________.A)%B)%C)%D)%E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:FV=1000,n=4,PMT=100,i=12,PV=;$100/$=%.7.Acouponbondpaysannualinterest,hasaparvalueof$1,000,maturesin12years,hasacouponrateof11%,andhasayieldtomaturityof12%.Thecurrentyieldonthisbondis___________.A)%B)%C)%D)%E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:FV=1000,n=12,PMT=110,i=12,PV=;$100/$=%.8.Ofthefollowingfourinvestments,________isconsideredthesafest.A)commercialpaperB)corporatebondsC)U.S.AgencyissuesD)TreasurybondsE)TreasurybillsAnswer:EDifficulty:EasyRationale:OnlyTreasuryissuesareinsuredbytheU.S.government;theshorter-termtheinstrument,thesafertheinstrument.9.Toearnahighratingfromthebondratingagencies,afirmshouldhaveA)alowtimesinterestearnedratioB)alowdebttoequityratioC)ahighquickratioD)BandCE)AandCAnswer:DDifficulty:EasyRationale:Highvaluesforthetimesinterestandquickratiosandalowdebttoequityratioaredesirableindicatorsofsafety.10.Atissue,couponbondstypicallysell________.A)aboveparvalueB)belowparC)atornearparvalueD)atavalueunrelatedtoparE)noneoftheaboveAnswer:CDifficulty:EasyRationale:Iftheinvestmentbankerhasappraisedthemarketandthequalityofthebondcorrectly,thebondwillsellatornearpar(unlessinterestrateshavechangedverydramaticallyandveryquicklyaroundthetimeofissuance).11.AccruedinterestA)isquotedinthebondpriceinthefinancialpress.B)mustbepaidbythebuyerofthebondandremittedtothesellerofthebond.C)mustbepaidtothebrokerfortheinconvenienceofsellingbondsbetweenmaturitydates.D)AandB.E)AandC.Answer:BDifficulty:ModerateRationale:Accruedinterestmustbepaidbythebuyer,butisnotincludedinthequotationspageprice.12.TheinvoicepriceofabondthatabuyerwouldpayisequaltoA)theaskedpriceplusaccruedinterest.B)theaskedpricelessaccruedinterest.C)thebidpriceplusaccruedinterest.D)thebidpricelessaccruedinterest.E)thebidprice.Answer:ADifficulty:EasyRationale:Thebuyerofabondwillbuyattheaskedpriceandwillalsobeinvoicedforanyaccruedinterestduetotheseller.13.An8%couponU.S.TreasurynotepaysinterestonMay30andNovember30andistradedforsettlementonAugust15.Theaccruedinterestonthe$100,000facevalueofthisnoteis_________.A)$B)$C)$D)$1,E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:76/183($4,000)=$1,.Approximation:.08/12*100,000=permonth.month*months=14.Acouponbondisreportedashavinganaskpriceof113%ofthe$1,000parvalueintheWallStreetJournal.Ifthelastinterestpaymentwasmadetwomonthsagoandthecouponrateis12%,theinvoicepriceofthebondwillbe____________.A)$1,100B)$1,110C)$1,150D)$1,160E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:$1,130+$20(accruedinterest)=$1,150.15.ThebondsofFordMotorCompanyhavereceivedaratingof"D"byMoody's.The"D"ratingindicatesA)thebondsareinsuredB)thebondsarejunkbondsC)thebondsarereferredtoas"highyield"bondsD)AandBE)BandCAnswer:EDifficulty:EasyRationale:Dratingsareriskybonds,oftencalledjunkbonds(orhighyieldbondsbythosemarketingsuchbonds).16.ThebondmarketA)canbequite"thin".B)primarilyconsistsofanetworkofbonddealersintheoverthecountermarket.C)consistsofmanyinvestorsonanygivenday.D)AandB.E)BandC.Answer:DDifficulty:EasyRationale:Thebondmarket,unlikethestockmarket,canbeaverythinlytradedmarket.Inaddition,mostbondsaretradedbydealers.17.Ceterisparibus,thepriceandyieldonabondareA)positivelyrelated.B)negativelyrelated.C)sometimespositivelyandsometimesnegativelyrelated.E)notrelated.E)indefinitelyrelated.Answer:BDifficulty:EasyRationale:Bondpricesandyieldsareinverselyrelated.18.The______isameasureoftheaveragerateofreturnaninvestorwillearniftheinvestorbuysthebondnowandholdsuntilmaturity.A)currentyieldB)dividendyieldC)P/EratioD)yieldtomaturityE)discountyieldAnswer:DDifficulty:EasyRationale:Thecurrentyieldistheannualinterestasapercentofcurrentmarketprice;theotherchoicesdonotapplytobonds.19.The_________givesthenumberofsharesforwhicheachconvertiblebondcanbeexchanged.A)conversionratioB)currentratioC)P/EratioD)conversionpremiumE)convertiblefloorAnswer:ADifficulty:EasyRationale:Theconversionpremiumistheamountforwhichthebondsellsaboveconversionvalue;thepriceofbondasastraightbondprovidesthefloor.Theothertermsarenotspecificallyrelevanttoconvertiblebonds.20.Acouponbondisabondthat_________.A)paysinterestonaregularbasis(typicallyeverysixmonths)B)doesnotpayinterestonaregularbasisbutpaysalumpsumatmaturityC)canalwaysbeconvertedintoaspecificnumberofsharesofcommonstockintheissuingcompanyD)alwayssellsatparE)noneoftheaboveAnswer:ADifficulty:EasyRationale:Acouponbondwillpaythecouponrateofinterestonasemiannualbasisunlessthefirmdefaultsonthebond.Convertiblebondsarespecifictypesofbonds.21.A___________bondisabondwherethebondholderhastherighttocashinthebondbeforematurityataspecifiedpriceafteraspecificdate.A)callableB)couponC)putD)TreasuryE)zero-couponAnswer:CDifficulty:EasyRationale:Anybondmayberedeemedpriortomaturity,butallbondsotherthanputbondsareredeemedatapricedeterminedbytheprevailinginterestrates.22.CallablebondsA)arecalledwheninterestratesdeclineappreciably.B)haveacallpricethatdeclinesastimepasses.C)arecalledwheninterestratesincreaseappreciably.D)AandB.E)BandC.Answer:DDifficulty:EasyRationale:Callablebondsoftenarerefunded(called)wheninterestratesdeclineappreciably.Thecallpriceofthebond(approximatelyparandoneyear'scouponpayment)declinestoparastimepassesandmaturityisreached.23.ATreasurybonddueinoneyearhasayieldof%;aTreasurybondduein5yearshasayieldof%.AbondissuedbyFordMotorCompanyduein5yearshasayieldof%;abondissuedbyShellOildueinoneyearhasayieldof%.ThedefaultriskpremiumsonthebondsissuedbyShellandFord,respectively,areA)%and%B)%and%C)%and%D)%and%E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:Shell:%-%=.8%;Ford:%-%=%.24.ATreasurybonddueinoneyearhasayieldof%;aTreasurybondduein5yearshasayieldof%.AbondissuedbyLucentTechnologiesduein5yearshasayieldof%;abondissuedbyMobildueinoneyearhasayieldof%.ThedefaultriskpremiumsonthebondsissuedbyMobilandLucentTechnologies,respectively,are:A)%and%B)%and.7%C)%and%D)%and%E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:Mobil:%-%=%;LucentTechnologies:%-%=%.25.ATreasurybonddueinoneyearhasayieldof%;aTreasurybondduein5yearshasayieldof%.AbondissuedbyXeroxduein5yearshasayieldof%;abondissuedbyExxondueinoneyearhasayieldof%.ThedefaultriskpremiumsonthebondsissuedbyExxonandXerox,respectively,areA)%and%B)%and.7%C)%and%D)%and%E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:Exxon:%-%=%;Xerox:7.9%-%=%.26.Floating-ratebondsaredesignedto___________whileconvertiblebondsaredesignedto__________.A)minimizetheholders'interestraterisk;givetheinvestortheabilitytoshareinthepriceappreciationofthecompany'sstockB)maximizetheholders'interestraterisk;givetheinvestortheabilitytoshareinthepriceappreciationofthecompany'sstockC)minimizetheholders'interestraterisk;givetheinvestortheabilitytobenefitfrominterestratechangesD)maximizetheholders'interestraterisk;giveinvestortheabilitytoshareintheprofitsoftheissuingcompanyE)noneoftheaboveAnswer:ADifficulty:ModerateRationale:Floatingratebondsallowtheinvestortoearnarateofinterestincometiedtocurrentinterestrates,thusnegatingoneofthemajordisadvantagesoffixedincomeinvestments.Convertiblebondsallowtheinvestortobenefitfromtheappreciationofthestockprice,eitherbyconvertingtostockorholdingthebond,whichwillincreaseinpriceasthestockpriceincreases.27.Acouponbondthatpaysinterestannuallyissellingatparvalueof$1,000,maturesin5years,andhasacouponrateof9%.Theyieldtomaturityonthisbondis:A)%B)%C)%D)%E)noneoftheaboveAnswer:CDifficulty:EasyRationale:Whenabondsellsatparvalue,thecouponrateisequaltotheyieldtomaturity.28.Acouponbondthatpaysinterestannuallyhasaparvalueof$1,000,maturesin5years,andhasayieldtomaturityof10%.Theintrinsicvalueofthebondtodaywillbe______ifthecouponrateis7%.A)$B)$C)$1,D)$E)$1,Answer:DDifficulty:ModerateRationale:FV=1000,PMT=70,n=5,i=10,PV=.29.Acouponbondthatpaysinterestannually,hasaparvalueof$1,000,maturesin5years,andhasayieldtomaturityof10%.Theintrinsicvalueofthebondtodaywillbe_________ifthecouponrateis12%.A)$B)$C)$1,D)$1,E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:FV=1000,PMT=120,n=5,i=10,PV=30.Acouponbondthatpaysinterestsemi-annuallyhasaparvalueof$1,000,maturesin5years,andhasayieldtomaturityof10%.Theintrinsicvalueofthebondtodaywillbe__________ifthecouponrateis8%.A)$B)$C)$1,D)$1,E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:FV=1000,PMT=40,n=10,i=5,PV=31.Acouponbondthatpaysinterestsemi-annuallyhasaparvalueof$1,000,maturesin5years,andhasayieldtomaturityof10%.Theintrinsicvalueofthebondtodaywillbe________ifthecouponrateis12%.A)$B)$C)$1,D)$1,E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:FV=1000,PMT=60,n=10,i=5,PV=32.Acouponbondthatpaysinterestof$100annuallyhasaparvalueof$1,000,maturesin5years,andissellingtodayata$72discountfromparvalue.Theyieldtomaturityonthisbondis__________.A)%B)%C)%D)%E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:FV=1000,PMT=100,n=5,PV=-928,i=%33.Youpurchasedanannualinterestcouponbondoneyearagothatnowhas6yearsremaininguntilmaturity.Thecouponrateofinterestwas10%andparvaluewas$1,000.Atthetimeyoupurchasedthebond,theyieldtomaturitywas8%.TheamountyoupaidforthisbondoneyearagowasA)$1,.B)$1,.C)$1,.D)$E)$1,.Answer:EDifficulty:ModerateRationale:FV=1000,PMT=100,n=7,i=8,PV=34.Youpurchasedanannualinterestcouponbondoneyearagothathad6yearsremainingtomaturityatthattime.Thecouponinterestratewas10%andtheparvaluewas$1,000.Atthetimeyoupurchasedthebond,theyieldtomaturitywas8%.Ifyousoldthebondafterreceivingthefirstinterestpaymentandtheyieldtomaturitycontinuedtobe8%,yourannualtotalrateofreturnonholdingthebondforthatyearwouldhavebeen_________.A)%B)%C)%D)%E)noneoftheaboveAnswer:CDifficulty:DifficultRationale:FV=1000,PMT=100,n=6,i=8,PV=;FV=1000,PMT=100,n=5,i=8,PV=;HPR=-+100)/=8%35.Considertwobonds,AandB.Bothbondspresentlyaresellingattheirparvalueof$1,000.Eachpaysinterestof$120annually.BondAwillmaturein5yearswhilebondBwillmaturein6years.Iftheyieldstomaturityonthetwobondschangefrom12%to10%,____________.A)bothbondswillincreaseinvalue,butbondAwillincreasemorethanbondBB)bothbondswillincreaseinvalue,butbondBwillincreasemorethanbondAC)bothbondswilldecreaseinvalue,butbondAwilldecreasemorethanbondBD)bothbondswilldecreaseinvalue,butbondBwilldecreasemorethanbondAE)noneoftheaboveAnswer:BDifficulty:ModerateRationale:Thelongerthematurity,thegreaterthepricechangewheninterestrateschange.36.Azero-couponbondhasayieldtomaturityof9%andaparvalueof$1,000.Ifthebondmaturesin8years,thebondshouldsellforapriceof_______today.A)B)$C)$D)$E)noneoftheaboveAnswer:BDifficulty:ModerateRationale:$1,000/8=$37.Youhavejustpurchaseda10-yearzero-couponbondwithayieldtomaturityof10%andaparvalueof$1,000.WhatwouldyourrateofreturnattheendoftheyearbeifyousellthebondAssumetheyieldtomaturityonthebondis11%atthetimeyousell.A)%B)%C)%D)%E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:$1,000/10=$;$1,000/9=$;($-$/$=%.38.ATreasurybillwithaparvalueof$100,000dueonemonthfromnowissellingtodayfor$99,010.Theeffectiveannualyieldis__________.A)%B)%C)%D)%E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:$990/$99,010=;12-=%.39.ATreasurybillwithaparvalueof$100,000duetwomonthsfromnowissellingtodayfor$98,039,withaneffectiveannualyieldof_________.A)%B)%C)%D)%E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:$1,961/$98,039=;6-1=%.40.ATreasurybillwithaparvalueof$100,000duethreemonthsfromnowissellingtodayfor$97,087,withaneffectiveannualyieldof_________.A)%B)%C)%D)%E)noneoftheaboveAnswer:BDifficulty:ModerateRationale:$2,913/$97,087=;4-=%.41.Acouponbondpaysinterestsemi-annually,maturesin5years,hasaparvalueof$1,000andacouponrateof12%,andaneffectiveannualyieldtomaturityof%.Thepricethebondshouldsellfortodayis________.A)$B)$C)$1,D)$1,E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:1/2-1=5%,N=10,I=5%,PMT=60,FV=1000,PV=1,.42.Aconvertiblebondhasaparvalueof$1,000andacurrentmarketpriceof$850.Thecurrentpriceoftheissuingfirm'sstockis$29andtheconversionratiois30shares.Thebond'smarketconversionvalueis______.A)$729B)$810C)$870D)$1,000E)noneoftheaboveAnswer:CDifficulty:EasyRationale:30sharesX$29/share=$870.43.Aconvertiblebondhasaparvalueof$1,000andacurrentmarketvalueof$850.Thecurrentpriceoftheissuingfirm'sstockis$27andtheconversionratiois30shares.Thebond'sconversionpremiumis_________.A)$40B)$150C)$190D)$200E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:$850-$810=$40.Usethefollowingtoanswerquestions44-47:Considerthefollowing$1,000parvaluezero-couponbonds:44.TheyieldtomaturityonbondAis____________.A)10%B)11%C)12%D)14%E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:($1,000-$/$=10%.45.TheyieldtomaturityonbondBis_________.A)10%B)11%C)12%D)14%E)noneoftheaboveAnswer:BDifficulty:ModerateRationale:($1,000-$/$=;1/2-=11%.46.TheyieldtomaturityonbondCis____________.A)10%B)11%C)12%D)14%E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:($1,000-$/$=;1/3-=12%.47.TheyieldtomaturityonbondDis_______.A)10%B)11%C)12%D)14%E)noneoftheaboveAnswer:CDifficulty:ModerateRationale:($1,000-$/$=;1/4-=12%.48.A10%couponbond,annualpayments,10yearstomaturityiscallablein3yearsatacallpriceof$1,100.Ifthebondissellingtodayfor$975,theyieldtocallis_________.A)%B)%C)%D)%E)noneoftheaboveAnswer:DDifficulty:ModerateRationale:FV=1100,n=3,PMT=100,PV=-975,i=%.49.A12%couponbond,semiannualpayments,iscallablein5years.Thecallpriceis$1,120;ifthebondissellingtodayfor$1,110,whatistheyieldtocallA)%.B)%.C)%.D)%.E)noneoftheabove.Answer:CDifficulty:ModerateRationale:YTC=FV=1120,n=10,PMT=60,PV=-1,110mi=%,*2=50.A10%coupon,annualpayments,bondmaturingin10years,isexpectedtomakeallcouponpayments,buttopayonly50%ofparvalueatmaturity.Whatistheexpectedyieldonthisbondifthebondispurchasedfor$975A)%.B)%.C)%.D)%.E)noneoftheabove.Answer:BDifficulty:ModerateRationale:FV=500,PMT=100,n=10,PV=-975,i=%51.Youpurchasedanannualinterestcouponbondoneyearagowith6yearsremainingtomaturityatthetimeofpurchase.Thecouponinterestrateis10%andparvalueis$1,000.Atthetimeyoupurchasedthebond,theyieldtomaturitywas8%.Ifyousoldthebondafterreceivingthefirstinterestpaymentandthebond'syieldtomaturityhadchangedto7%,yourannualtotalrateofreturnonholdingthebondforthatyearwouldhavebeen_________.A)%B)%C)%D)%E)noneoftheaboveAnswer:DDifficulty:DifficultRationale:FV=1000,PMT=100,n=6,i=8,PV=;FV=1000,PMT=100,n=5,i=7,PV=;HPR=-+100)/=%.52.The________isusedtocalculatethepresentvalueofabond.A)nominalyieldB)currentyieldC)yieldtomaturityD)yieldtocallE)noneoftheaboveAnswer:CDifficulty:EasyRationale:Yieldtomaturityisthediscountrateusedinthebondvaluationformula.Forcallablebonds,yieldtocallissometimesthemoreappropriatecalculationfortheinvestor(ifinterestratesareexpectedtodecrease).53.Theyieldtomaturityonabondis________.A)belowthecouponratewhenthebondsellsatadiscount,andequaltothecouponratewhenthebondsellsatapremium.B)thediscountratethatwillsetthepresentvalueofthepaymentsequaltothebondprice.C)basedontheassumptionthatanypaymentsreceivedarereinvestedatthecouponrate.D)noneoftheabove.E)A,B,andC.Answer:BDifficulty:EasyRationale:ThereverseofAistrue;forCtobetruepaymentsmustbereinvestedattheyieldtomaturity.54.Abondwillsellatadiscountwhen__________.A)thecouponrateisgreaterthanthecurrentyieldandthecurrentyieldisgreaterthanyieldtomaturityB)thecouponrateisgreaterthanyieldtomaturityC)thecouponrateislessthanthecurrentyieldandthecurrentyieldisgreaterthantheyieldtomaturityD)thecouponrateislessthanthecurrentyieldandthecurrentyieldislessthanyieldtomaturityE)noneoftheaboveistrue.Answer:DDifficulty:ModerateRationale:Inorderfortheinvestortoearnmorethanthecurrentyieldthebondmustbesellingforadiscount.Yieldtomaturitywillbegreaterthancurrentyieldasinvestorwillhavepurchasedthebondatdiscountandwillbereceivingthecouponpaymentsoverthelifeofthebond.55.Considera5-yearbondwitha10%couponthathasapresentyieldtomaturityof8%.Ifinterestratesremainconstant,oneyearfromnowthepriceofthisbondwillbe_______.A)higherB)lowerC)thesameD)cannotbedeterminedE)$1,000Answer:BDifficulty:ModerateRationale:Thisbondisapremiumbondasinterestrateshavedeclinedsincethebondwasissued.Ifinterestratesremainconstant,thepriceofapremiumbonddeclinesasthebondapproachesmaturity.56.Abondhasaparvalueof$1,000,atimetomaturityof20years,acouponrateof10%withinterestpaidannually,acurrentpriceof$850andayieldtomaturityof12%.Intuitivelyandwithouttheusecalculations,ifinterestpaymentsarereinvestedat10%,therealizedcompoundyieldonthisbondmustbe________.A)%B)%C)%D)%E)noneoftheaboveAnswer:BDifficulty:DifficultRationale:Inordertoearnyieldtomaturity,thecouponsmustbereinvestedattheyieldtomaturity.However,asthebondissellingatdiscounttheyieldmustbehigherthanthecouponrate.Therefore,Bistheonlypossibleanswer.57.Abondwitha12%coupon,10yearstomaturityandsellingat88hasayieldtomaturityof_______.A)over14%B)between13%and14%C)between12%and13%D)between10%and12%E)lessthan12%Answer:ADifficulty:ModerateRationale:YTM=%.58.Usingsemiannualcompounding,a15-yearzerocouponbondthathasaparvalueof$1,000andarequiredreturnof8%wouldbepricedatapproximately______.A)$308B)$315C)$464D)$555E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:FV=1000,n=30,I=4,PV=59.Theyieldtomaturityofa20-yearzerocouponbondthatissellingfor$withavalueatmaturityof$1,000is________.A)%B)%C)%D)%E)noneoftheaboveAnswer:ADifficulty:ModerateRationale:[$1,000/($]1/20-1=%.60.WhichoneofthefollowingstatementsaboutconvertiblesistrueA)Thelongerthecallprotectiononaconvertible,thelessthesecurityisworth.B)Themorevolatiletheunderlyingstock,thegreaterthevalueoftheconversionfeature.C)Thesmallerthespreadbetweenthedividendyieldonthestockandtheyield-to-maturityonthebond,themoretheconvertibleisworth.D)Thecollateralthatisusedtosecureaconvertiblebondisonereasonconvertiblesaremoreattractivethantheunderlyingstock.E)Convertiblesarenotcallable.Answer:BDifficulty:ModerateRationale:Thelongerthecallprotectionthemoreattractivethebond.Thesmallerthespread(c),thelessthebondisworth.Convertiblesaredebentures(unsecuredbonds).Allconvertiblesarecallableattheoptionoftheissuer.61.Considera$1,000parvalue20-yearzerocouponbondissuedatayieldtomaturityof10%.Ifyoubuythatbondwhenitisissuedandcontinuetoholdthebondasyieldsdeclineto9%,theimputedinterestincomeforthefirstyearofthatbondisA)zero.B)$.C)$.D)$.E)noneoftheabove.Answer:BDifficulty:ModerateRationale:$1,000/20=$;$1,000/19=$;$-$=$.62.ThebondindentureincludesA)thecouponrateofthebond.B)theparvalueofthebond.C)thematuritydateofthebond.D)alloftheabove.E)noneoftheabove.Answer:DDifficulty:EasyRationale:Thebondindentureincludesthecouponrate,parvalueandmaturitydateofthebondaswellasanyothercontractualfeatures.63.ATreasurybondquotedat107:16107:18hasabidpriceof_______andanaskedpriceof_____.A)$,$B)$1,,$1,C)$1,,$1,D)$1,,$1,E)$1,,$1,Answer:CDifficulty:ModerateRationale:Treasurybondsarequotedasapercentageofparvalue($1,000)withthenumberafterthecolonrepresentingthefractionsofapointin32nds.Thebidpriceisquotedfirstandisthelowerofthetwo.64.BearerbondsareA)bondstradedwithoutanyrecordofownership.B)helpfultotaxauthoritiesintheenforcementoftaxcollection.C)rareintheUnitedStatestoday.D)alloftheabove.E)bothAandC.Answer:EDifficulty:ModerateRationale:Bearerbondsarenotregisteredsothereisnorecordofownership.TheyarerareintheUnitedStatestoday.Taxauthoritiesfindregisteredbondshelpfulintaxenforcementbutnotbearerbonds.65.MostcorporatebondsaretradedA)onaformalexchangeoperatedbytheNewYorkStockExchange.B)bytheissuingcor