FIN 300 BONDS || 100% DETAILED ANSWERS.
Name primary buyers of bonds correct answers individuals, banks, insurance companies, pension
funds, mutual funds
how much of the bond mkt do treasuries make up? correct answers 35%
how much of bond market to corporates make up? correct answers 24%
What are sovereign bonds? correct answers bonds issued by foreign governments
what are convertible bonds? correct answers Bonds that can be converted into common stock of
the company
what are junk bonds? correct answers High-risk, high-interest bonds
Interest rates are the price of ___________? correct answers money
If interest rates go higher, what happens to real estate prices? correct answers real estate prices
go LOWER
if interest rates go higher, bond prices go...? correct answers bond prices go lower
what is the stated rate on a bond? correct answers coupon rate
Most common timeframe for bond interest payments in US? correct answers semiannually
required rate of return helps calculate the ____ on a security? correct answers fair present value
, required rate of return is the interest rate an investor should receive on a security given its what?
correct answers risk factor
If the interest rate is greater than the coupon the bond sells for a ...? correct answers discount
if interest rate = coupon, trades at Par TRUE OR FALSE correct answers TRUE
what two companies are triple A rated? correct answers J&J, microsoft (exon was downgraded
last year)
annual interest payment/current price = correct answers current yeild
yeild to maturity correct answers total return anticipated on bond if bond is held until end of life
yeild to maturity and current yeild are similar; which factors in the TVM? correct answers YTM,
it accounts for the PV of a bonds future coupon
what requires financial institutions in US to maintain certain amounts of cash? correct answers
FED funds
banks lend cash to each other at the ________ rate? correct answers fed funds rate
are fed funds secured? correct answers no
What is LIBOR? correct answers London Interbank Offered Rate (LIBOR)
the rates investors earn on TBILLS and TBONDS are? correct answers treasury rates
Name primary buyers of bonds correct answers individuals, banks, insurance companies, pension
funds, mutual funds
how much of the bond mkt do treasuries make up? correct answers 35%
how much of bond market to corporates make up? correct answers 24%
What are sovereign bonds? correct answers bonds issued by foreign governments
what are convertible bonds? correct answers Bonds that can be converted into common stock of
the company
what are junk bonds? correct answers High-risk, high-interest bonds
Interest rates are the price of ___________? correct answers money
If interest rates go higher, what happens to real estate prices? correct answers real estate prices
go LOWER
if interest rates go higher, bond prices go...? correct answers bond prices go lower
what is the stated rate on a bond? correct answers coupon rate
Most common timeframe for bond interest payments in US? correct answers semiannually
required rate of return helps calculate the ____ on a security? correct answers fair present value
, required rate of return is the interest rate an investor should receive on a security given its what?
correct answers risk factor
If the interest rate is greater than the coupon the bond sells for a ...? correct answers discount
if interest rate = coupon, trades at Par TRUE OR FALSE correct answers TRUE
what two companies are triple A rated? correct answers J&J, microsoft (exon was downgraded
last year)
annual interest payment/current price = correct answers current yeild
yeild to maturity correct answers total return anticipated on bond if bond is held until end of life
yeild to maturity and current yeild are similar; which factors in the TVM? correct answers YTM,
it accounts for the PV of a bonds future coupon
what requires financial institutions in US to maintain certain amounts of cash? correct answers
FED funds
banks lend cash to each other at the ________ rate? correct answers fed funds rate
are fed funds secured? correct answers no
What is LIBOR? correct answers London Interbank Offered Rate (LIBOR)
the rates investors earn on TBILLS and TBONDS are? correct answers treasury rates
