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SDSU BA 323 FINANCE EXAM 2 NEWEST 2025/2026 ACTUAL EXAM
WITH COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
(100% VERIFIED ANSWERS) |ALREADY GRADED A+| ||PROFESSOR
VERIFIED||
A long-term debt instrument in which a borrower agrees to make
payments of principal and interest, on specific dates, to the
holders of the bond. - answer-bond
Par value, coupon interest rate, maturity date, issue date, and
yield to maturity. - answer-what are the five key features of a
bond?
The amount that an investor pays to purchase a bond and that will
be repaid to the investor at maturity.
Par value = future value - answer-par value
The percentage of a bond's par value that will be paid annually,
typically in two equal semiannual payments, as interest.
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(stated interest rate paid by the issuer. Multiply by par value to get
dollar payment of interest.) - answer-coupon interest rate
Years until the bond must be repaid. - answer-mature date
When the bond was issued - answer-issue date
The rate of return a bondholder will receive if the bond is held to
maturity. "promised yield". - answer-yield to maturity
A provision in a bond contract that gives the issuer the right to
redeem the bonds under specified terms prior to the normal
maturity date.
*companies like these incase interest rates go down! Investors
don't! - answer-call provision
Penalty paid by the corporation is a bond is called (amount in
excess of par-value).
Bond investors require higher yields
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Typically requires 5 to 10 years to call - answer-call premium
At maturity! - answer-when does the value of a bond equal its par
value?
A bond that sells above its par value; occurs whenever the going
rate of interest is below the coupon rate - answer-premium bond
A bond that sells below its par value; occurs whenever the going
rate of interest is above the coupon rate - answer-discount bond
The rate of return earned on a bond when it is called before its
maturity date. • use the call price rather than the maturity value -
answer-yield to call
The risk that a decline in interest rates will lead to a decline in
income from a bond portfolio.
SDSU BA 323 FINANCE EXAM 2 NEWEST 2025/2026 ACTUAL EXAM
WITH COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS
(100% VERIFIED ANSWERS) |ALREADY GRADED A+| ||PROFESSOR
VERIFIED||
A long-term debt instrument in which a borrower agrees to make
payments of principal and interest, on specific dates, to the
holders of the bond. - answer-bond
Par value, coupon interest rate, maturity date, issue date, and
yield to maturity. - answer-what are the five key features of a
bond?
The amount that an investor pays to purchase a bond and that will
be repaid to the investor at maturity.
Par value = future value - answer-par value
The percentage of a bond's par value that will be paid annually,
typically in two equal semiannual payments, as interest.
,2|Page
(stated interest rate paid by the issuer. Multiply by par value to get
dollar payment of interest.) - answer-coupon interest rate
Years until the bond must be repaid. - answer-mature date
When the bond was issued - answer-issue date
The rate of return a bondholder will receive if the bond is held to
maturity. "promised yield". - answer-yield to maturity
A provision in a bond contract that gives the issuer the right to
redeem the bonds under specified terms prior to the normal
maturity date.
*companies like these incase interest rates go down! Investors
don't! - answer-call provision
Penalty paid by the corporation is a bond is called (amount in
excess of par-value).
Bond investors require higher yields
, 3|Page
Typically requires 5 to 10 years to call - answer-call premium
At maturity! - answer-when does the value of a bond equal its par
value?
A bond that sells above its par value; occurs whenever the going
rate of interest is below the coupon rate - answer-premium bond
A bond that sells below its par value; occurs whenever the going
rate of interest is above the coupon rate - answer-discount bond
The rate of return earned on a bond when it is called before its
maturity date. • use the call price rather than the maturity value -
answer-yield to call
The risk that a decline in interest rates will lead to a decline in
income from a bond portfolio.
