The duration of bond is function of the bond

Assignment Help Financial Management

Reference no: EM131859462

1. The duration of a bond is a function of the bond's

A) coupon rate.

B) yield to maturity.

C) time to maturity.

D) All of the options

E) None of the options

2. Ceteris paribus, the duration of a bond is negatively correlated with the bond's

A) time to maturity.

B) coupon rate.

C) yield to maturity.

D) coupon rate and yield to maturity.

E) None of the options

3. The duration of a par value bond with a coupon rate of 8% (paid annually) and a remaining time to maturity of 5 years is

A) 5 years. B) 5.4 years. C) 4.17 years. D) 4.31 years.

4. Par value bond XYZ has a modified duration of 6. Which one of the following statements regarding the bond is true?

A) If the market yield increases by 1%, the bond's price will decrease by $60.

B) If the market yield increases by 1%, the bond's price will increase by $50.

C) If the market yield increases by 1%, the bond's price will decrease by $50.

D) If the market yield increases by 1%, the bond's price will increase by $60.

5. Identify the bond that has the longest duration (no calculations necessary).

A) 20-year maturity with an 8% coupon

B) 20-year maturity with a 12% coupon

C) 20-year maturity with a 0% coupon

D) 10-year maturity with a 15% coupon

E) 12-year maturity with a 12% coupon

Reference no: EM131859462

Questions Cloud

Employer stock from the company stock bonus plan : Carrie retired last week and received a lumpsum distribution of her employer's stock from the company's stock bonus plan.

What is the value of the warrants : What is the value of the warrants that were attached to the second issue?

What is the component cost of these bonds with warrants : If investors pay $700 for each bond, what is the value of each warrant attached to the bond issue? What is the component cost of these bonds with warrants?

Coupon bond that pays interest annually : A coupon bond that pays interest annually is selling at par value of $1,000, matures in five years and has a coupon rate of 9%. The yield to maturity on bond is

The duration of bond is function of the bond : The duration of a bond is a function of the bond's. Ceteris paribus, the duration of a bond is negatively correlated with the bond's.

Why is property tax considered regressive tax : Why is property tax considered a regressive tax? What measures does government take to make it less regressive?

What does the IRR rule indicate about this investment : What is the IRR of this investment opportunity? What does the IRR rule indicate about this investment?

The equivalent cost to the company of this transaction : A firm purchased some equipment at a price of $50 000. what was the equivalent cost to the company of this transaction on the purchase date?

What is the company net working capital : What is the company’s net working capital?

User Account

All Pages