Ch.7 Bond Quiz

Which concept is used to compute bond prices?

• Present value concepts.

• Future value calculations.

• Inflation rates.

• Exchange rates.

What is the bond's current time to maturity if it was issued 15 years ago with an at-issue time to maturity of 30 years?

• 10 years

• 15 years

• 20 years

• 25 years

The current price of a bond is the present value of what?

• Past cash flows

• Future cash flows

• Current cash flows

• Historical cash flows

What does PV stand for in bond valuation?

• Present Value

• Par Value

• Premium Value

• Period Value

In the formula for the present value of a bond, what does PMT represent?

• Payment amount

• Present value

• Future value

• Interest rate

Which component is NOT part of the present value of a bond calculation?

• Future value of interest payments

• Present value of interest payments

• Present value of par value

• Interest payment annuity cash flow

What does 'I' represent in the calculator hints?

• Interest rate per period

• Initial investment

• Inflation rate

• Income

What does 'PMT' represent in the calculator hints?

• Payment per period

• Principal amount

• Profit margin

• Price of bond

What do municipal bonds appear to offer compared to corporate bonds and Treasury securities?

• High yields to maturity

• Low yields to maturity

• No yields to maturity

• Variable yields to maturity

What is the yield to maturity of the corporate bond mentioned in the document?

• 6.4 percent

• 5.7 percent

• 4.0 percent

• 5.88 percent