Bond Valuation and Stock Valuation Quiz 2023 Questions
and Answers 100% Correct
A 3.75 percent TIPS has an original reference CPI of 183.9. If the current CPI is
214.7, what is the current interest payment? (Assume semi-annual interest
payments and a par value of $1,000.)
$21.89
A 3.75 percent TIPS has an original reference CPI of 175.8. If the current CPI is
207.7, what is the current interest payment and par value of the TIPS? (Assume
semi-annual interest payments and $1,000 par value.)
$1,181.46, $22.15, respectively
A 2.5 percent TIPS has an original reference CPI of 170.4. If the current CPI is
205.7, what is the current interest payment and par value of the TIPS? (Assume
semi-annual interest payments and $1,000 par value.)
$1,207.16, $15.09, respectively
Which of the following determines the dollar amount of interest paid to
bondholders?
Coupon rate
Bonds are issued by which of the following?
All of the options
Which of the following are main issuers of bonds?
All of the options
Consider the following bond quote: a municipal bond quoted at 101.25. If the
municipal bond has a par value of $5,000, what is the price of the bond in dollars?
$5,062.50
Which of the following was the catalyst for the recent financial crisis?
Defaults on subprime mortgages.
Many bonds are not callable, but for those that are, which of following is a
common feature?
Called any time after 10 years of issuance.
Determine the interest payment for the following three bonds: 4 percent coupon
corporate bond (paid semi-annually), 4.75 percent coupon Treasury note, and a
corporate zero coupon bond maturing in 15 years. (Assume a $1,000 par value.)
$20.00, $23.75, $0, respectively
A 3.25 percent TIPS has an original reference CPI of 194.1. If the current CPI is
210.3, what is the current interest payment? (Assume semi-annual interest
payments and a par value of $1,000.)
$17.61
A bond issued by a corporation on June 15, 2007, is scheduled to mature on June
15, 2017. If today is December 16, 2008, what is this bond's time to maturity?
(Assume annual interest payments.)
8 years, 6 months
Which of the following would NOT be an example of an agency bond?
Treasury bills
, A 4.15 percent TIPS has an original reference CPI of 182.1. If the current CPI is
188.3, what is the par value of the TIPS?
$1,034.05
A 5.125 percent TIPS has an original reference CPI of 191.8. If the current CPI is
188.3, what is the par value of the TIPS?
$981.75
To compensate the bondholders for getting the bond called, the issuer pays
which of the following?
Call premium
A bond issued by a corporation on May 1, 1999, is scheduled to mature on May 1,
2019. If today is May 2, 2009, what is this bond's time to maturity? (Assume
annual interest payments.)
10 years
Which of the following issues Treasury Inflation Protected Securities (TIPS)?
U.S. Treasury
Which of the following is NOT a factor that determines the coupon rate of a
company's bonds?
All of the options are factors that determine the coupon rate of a company's bonds.
Calculate the price of a zero coupon bond that matures in 10 years if the market
interest rate is 6 percent. (Assume semi-annual compounding and $1,000 par
value.)
$553.68
Which of the following terms means that during periods when interest rates
change substantially, bondholders experience distinct gains and losses in their
bond investments?
Interest rate risk
The bond's annual coupon rate divided by its market price is referred to as the:
current yield.
Which of the following is used to compute bond cash interest payments?
Coupon rate.
What is the taxable equivalent yield on a municipal bond with a yield to maturity
of 4 percent for an investor in the 28 percent tax bracket?
5.56 percent
Rank from lowest credit risk to highest credit risk the following bonds, with the
same time to maturity, by their yield to maturity: Treasury bond with yield of 5.55
percent, IBM bond with yield of 7.95 percent, Trump Casino bond with a yield of
9.15 percent and Banc Ono bond with a yield of 6.12 percent.
Treasury, Banc Ono, IBM, Trump Casino
The NASDAQ Composite includes:
all of the stocks listed on the NASDAQ Stock Exchange.
If on November 27, 2017, The Dow Jones Industrial Average closed at 12,958.44,
which was up 215.04 that day. What was the return (in percent) of the stock
market that day?
+1.69 percent
and Answers 100% Correct
A 3.75 percent TIPS has an original reference CPI of 183.9. If the current CPI is
214.7, what is the current interest payment? (Assume semi-annual interest
payments and a par value of $1,000.)
$21.89
A 3.75 percent TIPS has an original reference CPI of 175.8. If the current CPI is
207.7, what is the current interest payment and par value of the TIPS? (Assume
semi-annual interest payments and $1,000 par value.)
$1,181.46, $22.15, respectively
A 2.5 percent TIPS has an original reference CPI of 170.4. If the current CPI is
205.7, what is the current interest payment and par value of the TIPS? (Assume
semi-annual interest payments and $1,000 par value.)
$1,207.16, $15.09, respectively
Which of the following determines the dollar amount of interest paid to
bondholders?
Coupon rate
Bonds are issued by which of the following?
All of the options
Which of the following are main issuers of bonds?
All of the options
Consider the following bond quote: a municipal bond quoted at 101.25. If the
municipal bond has a par value of $5,000, what is the price of the bond in dollars?
$5,062.50
Which of the following was the catalyst for the recent financial crisis?
Defaults on subprime mortgages.
Many bonds are not callable, but for those that are, which of following is a
common feature?
Called any time after 10 years of issuance.
Determine the interest payment for the following three bonds: 4 percent coupon
corporate bond (paid semi-annually), 4.75 percent coupon Treasury note, and a
corporate zero coupon bond maturing in 15 years. (Assume a $1,000 par value.)
$20.00, $23.75, $0, respectively
A 3.25 percent TIPS has an original reference CPI of 194.1. If the current CPI is
210.3, what is the current interest payment? (Assume semi-annual interest
payments and a par value of $1,000.)
$17.61
A bond issued by a corporation on June 15, 2007, is scheduled to mature on June
15, 2017. If today is December 16, 2008, what is this bond's time to maturity?
(Assume annual interest payments.)
8 years, 6 months
Which of the following would NOT be an example of an agency bond?
Treasury bills
, A 4.15 percent TIPS has an original reference CPI of 182.1. If the current CPI is
188.3, what is the par value of the TIPS?
$1,034.05
A 5.125 percent TIPS has an original reference CPI of 191.8. If the current CPI is
188.3, what is the par value of the TIPS?
$981.75
To compensate the bondholders for getting the bond called, the issuer pays
which of the following?
Call premium
A bond issued by a corporation on May 1, 1999, is scheduled to mature on May 1,
2019. If today is May 2, 2009, what is this bond's time to maturity? (Assume
annual interest payments.)
10 years
Which of the following issues Treasury Inflation Protected Securities (TIPS)?
U.S. Treasury
Which of the following is NOT a factor that determines the coupon rate of a
company's bonds?
All of the options are factors that determine the coupon rate of a company's bonds.
Calculate the price of a zero coupon bond that matures in 10 years if the market
interest rate is 6 percent. (Assume semi-annual compounding and $1,000 par
value.)
$553.68
Which of the following terms means that during periods when interest rates
change substantially, bondholders experience distinct gains and losses in their
bond investments?
Interest rate risk
The bond's annual coupon rate divided by its market price is referred to as the:
current yield.
Which of the following is used to compute bond cash interest payments?
Coupon rate.
What is the taxable equivalent yield on a municipal bond with a yield to maturity
of 4 percent for an investor in the 28 percent tax bracket?
5.56 percent
Rank from lowest credit risk to highest credit risk the following bonds, with the
same time to maturity, by their yield to maturity: Treasury bond with yield of 5.55
percent, IBM bond with yield of 7.95 percent, Trump Casino bond with a yield of
9.15 percent and Banc Ono bond with a yield of 6.12 percent.
Treasury, Banc Ono, IBM, Trump Casino
The NASDAQ Composite includes:
all of the stocks listed on the NASDAQ Stock Exchange.
If on November 27, 2017, The Dow Jones Industrial Average closed at 12,958.44,
which was up 215.04 that day. What was the return (in percent) of the stock
market that day?
+1.69 percent
