Reference no: EM132753967

Questions -

Q1. Suppose that you have a bond that offers a coupon rate of 10% paid semiannually. The face value of the bond is 1.000 TL and it matures in 4 years. If yield to maturity of the bond is 8%, what is the duration of this bond?

a) 3,32 years

b) 3,42 years

c) 3,50 years

d) 3,48 years

e) Other:

Q2. Suppose that you purchase a T-bill maturing in 133 days for 9.993,793 TL. The face value is 10.000 TL. What is the discount yield? (1 year = 360 days)

a) 0,158%

b) 0,148%

c) 0,168%

d) 0,170%

e) Other:

Q3. What would be the value of a bond that has a maturity of 5 years, quarterly coupon payment frequency, a face value of 1.000 TL and a 15% of coupon rate? Suppose that market interest rate is 12%.

a) 1.111,58 TL

b) 895,78 TL

c) 1.000,00 TL

d) 1,110.40 TL

e) Other:

Q4. A 1.000 TL par value bond with 5 years left to maturity pays an interest payment semiannually with a 6% coupon rate and is priced to have a 5% yield to maturity. If interest rates surprisingly increase by 0,5% right now, by how much would the bond's price change?

a) 20,16 TL

b) 21,16 TL

c) 22,16 TL

d) 23,16 TL

e) Other:

Q5. Suppose that a bank enters a reverse repurchase agreement in which it agrees to buy central bank funds from one of its correspondent banks at a price of 10.000.000 TL, with promise to sell these funds back at a price of 10.000.291,67 TL after 5 days. What is the repo yield? (1 year = 360 days)

a) 0,18%

b) 0,19%

c) 0,20%

d) 0,21%

e) Other:

Q6. Suppose that you invest in a T-bill with a 90-day maturity and a face value of 1.000 TL selling at a discount of 10%. Assume that 1 year = 360 days. What would be the effective annual return on your investment?

a) 10,66%

b) 2,56%

c) 10,81%

d) 10,38%

e) Other:

Q7. Which one of the following statements is true?

a) The lower the coupon payment of a bond, the shorter is its duration.

b) The lower the rate of return on a bond, the longer is its duration.

c) The duration of a zero coupon bond is always lower than its maturity.

d) Duration calculations ignore time value of money.

Q8. What is the price of a 90-day T-bill with a face value of 1.000 TL selling at a discount of 10% assuming that 1 year = 360 days?

a) 970 TL

b) 975 TL

c) 980 TL

d) 985 TL

e) Other:

Q9. An 11% coupon (paid annually) bond, with a 1.000 TL face value and 6 years remaining to maturity. The bond is selling at 1.065 TL. What is the yield to maturity?

a) 9,43%

b) 9,53%

c) 9,63%

d) 9,73%

e) Other:

Q10. Suppose that you invest in a bond that has a maturity of 5 years and a face value of 10.000 TL. The coupon rate is 15% and pays annually. The yield to maturity is 20%. What would be the dirty price at the end of year 3?

a) 10.205,63 TL

b) 10.446,76 TL

c) 10.736,11 TL

d) 11.083,33 TL

e) Other:

Q11. You plan to purchase a house for 120.000 TL using a 30 year loan. The loan rate offerred is 8%. You will make monthly payments. What is the monthly payment amount?

a) 780,52 TL

b) 880,52 TL

c) 980,52 TL

d) 1.080,52 TL

e) Other:

Q12. A t-bill that is 225 days from maturity is selling for 95.850 TL. The t-bill has a face value of 100.000 TL. What is the effective annual rate? (1 year=360 days)

a) 6,64%

b) 6,96%

c) 7,02%

d) 7,13%

e) Other:

Q13. Suppose that, a zero-coupon bond with a maturity of 20 years and with a par value of 1.000 TL is sold for an annual market yield of 10%. What would be the duration of the bond?

a) 17

b) 18

c) 19

d) 20

e) Other:

Q14. A 1.000 TL par value bond with 7 years left to maturity has a 9% coupon rate paid semiannually and is selling for 945,80 TL. What is the yield to maturity?

a) 3,05%

b) 4,05%

c) 5,05%

d) 10,10%

Q15. Which one of the following statements is false?

a) If the Treasury sold t-bonds more than expected in an auction, bond prices are expected to fall.

b) Settlement of t-bills by Treasury leads to an expectation that t-bond prices would fall.

c) Direct t-bill sale of Central Bank will lead to an expectation of fall in t-bond prices.

d) Foreign exchange sales of Central Bank will lead to an expectation of fall in t-bond prices.

e) Other:

Q16. An investor wants to value a 5-year bond with a face value equal to 1.000 TL that pays coupons semi-annually. The annual coupon rate and annual market interest rate equal to 8% and 10%, respectively. What would be the discount or premium on the bond?

a) 922,78 TL

b) 1.081,11 TL

c) 77,22 TL

d) 81,11 TL

e) Other:

Q17. What is the approximate value of zero coupon bond sold at a par value of 1.000 TL, has a maturity of 7 years from now and has a yield rate of 14%?

a) 450 TL

b) 400 TL

c) 500 TL

d) 550 TL

e) Other:

Q18. You would like to purchase a t-bill that is X days from maturity for 9.765 TL. The t-bill has a face value of 10.000 TL. The discount yield is 6,768%. If 1 year=360 days, what is X?

a) 120

b) 125

c) 130

d) 135

e) Other:

Q19. Suppose that you invest in a bond that has a maturity of 10 years and a face value of 100.000 TL. The coupon rate is 12% and pays annually. The yield to maturity is 10%. What would be the clean price at the end of year 6?

a) 108.710,52 TL

b) 107.581,57 TL

c) 106.339,73 TL

d) 104.973,70 TL

e) Other:

Q20. You have just been offerred a bond for 863,73 TL. The coupon rate is 8% payable annually, and interest rates are 10%. You want to know how many more interest payments wou will receive, but the party selling the bond cannot remember. If the par value is 1.000 TL, how many interest payments remain?

a) 12

b) 11

c) 10

d) 9

e) Other: