Ünite Sınavı Soruları

1. Long-term bond investors face higher interest rate risk.
2. Long-term bond investors will have a disadvantage when market interest rates increase
3. Short-term bond investor faces higher reinvestment rate risk.
4. Short-term bond investors will have a disadvantage when market interest rates decline.

Which of the statements above about bond investors is/are correct?

The yield curve plots the relationship between bond yields and which of the followings?

How much should you pay for a $50 bond with 12% coupon, annual payments, and 5 years to maturity if the interest rate is 14%?

Suppose that you are planning to invest in a stock that will pay $8 as dividend and its price will be $250 next year. Assume that this stock is correctly priced in the market and its market price is $245. What is the expected rate of return?

The difference between the promised yield on the corporate bond and the yield on government bond with the same coupon rate and maturity is called __________________.

I. Investment requirements,

II. Growth prospects,

III. Profitability,

IV. Payout decisions.

Which of the ones listed above is among the characteristics of a company on which dividends depend?

_ _ _ _ _ _ _  provide all or almost all of their returns from dividend yield.

Which of the following completes the sentences above?

What is the current price of a stock if it will be $50 two years from today, they distribute $4 as a dividend and if you require a return of 15% in order to invest in this stock?

Which one of the following is the term for the risk that cash flows received may not be able to be reinvested at the expected rates if market rates have changed?

1. When the market interest rate is equal to the coupon interest rate, bonds sell at their par value.
2. When the market interest rate is below the coupon interest rate, bonds sell above their par value and they are called premium bonds.
3. When the market interest rate exceeds the coupon interest rate, bonds sell below their par and are called discount bonds.
4. Market interest rates might change but there is no change in coupon interest rate.

Which of the statements above about interest rates and bond values is/are correct?

I. Bonds cannot be issued by governments,

II. Par value may vary depending on the issuing body,

III. Coupon payments are periodic,

IV. Coupon rate of a bond determines interest payments.

Which of the ones listed above is correct concerning bonds?

If the market interest rate is 13%, the present value of the bond coupons equals to 80.000 Turkish Liras and the present value of the bond's par value equals to 82.000, what will be the value of the bond?

What is the difference between nominal and real interest rates?

I. Coupon Payments
II. Price Changes
III. Initial Price

Which one (or ones) above do (es) affect the rate of return of a bond?

I. Right to share in the residual in case of dissolution,

II. Right to receive dividends,

III. A preemptive right to prevent undesired reduction of ownership share

IV. Right to vote.

Which of the ones listed above is among the rights that stock ownership provides?

Even though coupon interest rates are fixed, bond values still fluctuate with the changes in market interest rates. Which one of the following is the main reason for this?

If market interest rates increase, which one of the following is expected for a fixed-coupon payment bond?

Which of the following statements is not true regarding bonds?