Question 1: You have observed the following returns on ABC's stocks over the last five years:3.6%, 8.1%, -9.2%, 10.7%, -3.6% What is the geometric average returns on the stock over this five-year period.
Question 2: You have observed the following returns on ABC's stocks over the last five years:4.1%, 9%, -7%, 11%, -6.7% What is the arithmetic average returns on the stock over this five-year period.
Question 3: You have observed the following returns on ABC's stocks over the last five years: 4.2%, 8.4%, 9.3%, 10.5%, 6.7% What is the arithmetic average returns on the stock over this five-year period.
Question 4: You have observed the following returns on ABC's stocks over the last five years: 2.5%, 8.5%, 11.1%, 10.7%, 8.3%What is the geometric average returns on the stock over this five-year period.
Question 5: Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%. Compute the standard deviation of the returns.
Question 6: ABC's Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yield to call (YTC)?
Question 7: Stealers Wheel Software has 5.25% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 109.17% of par. What is the current yield?
Question 8: A firm's bonds have maturity of 10 years with a $1000 face value, an 8% semi-annual coupon, are callable in 5 years, at $1,050, and currently sells at a price of $1,100. What is the yield to call (YTC)?
Question 9: ABC Corp. issued 15-year bonds 2 years ago at a coupon rate of 10.6%. The bonds make semi-annual payments. If these bonds currently sell for 97% of par value, what is the YTM?
Question 10: The rate required in the market on a bond is called the: yield to maturity, liquidity premium, risk premium, current yield, call yield
Question 11: ABC Inc., has $1,000 face value bonds outstanding. These bonds mature in 3 years, and have a 6.5 percent coupon. The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield to maturity?
Question 12: A bond which sells for less than the face value is called a: premium bond, debenture, discount bond, perpetuity, par value bond.
Question 13: The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of __percent.
Question 14: ABC wants to issue 8-year, zero coupon bonds that yield 7.61 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding. Hint: zero coupon bonds means PMT = 0
Question 15: ABC has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 9 years; Coupon rate: 5%; Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 7.15%
Question 16: The principal amount of a bond that is repaid at the end of term is called the par value or the: back-end amount, coupon, coupon rate, discount amount, face value
Question 17: A discount bond has a yield to maturity that: exceeds the coupon rate. equals zero is equal to the current yield, is less than the coupon rate, equals the bond's coupon rate
Question 18: Assume that you wish to purchase a 15-year bond that has a maturity value of $1,000 and a coupon interest rate of 7%, paid semiannually. If you require a 10.59% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV.
Question 19: BCD's $1,000 par value bonds currently sell for $798.40. The coupon rate is 10%, paid semi-annually. If the bonds have 5 years to maturity, what is the yield to maturity?
Question 20: The 13.99 percent coupon bonds of the Peterson Co. are selling for $838.4. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent.
Question 21: A premium bond is a bond that: has a face value in excess of $1,000. has a par value which exceeds the face value, is selling for less than par value, is callable within 12 months or less, has a market price which exceeds the face value
Question 22: You paid $1,041 for a corporate bond that has a 7.59% coupon rate. What is the current yield? Hint: if nothing is mentioned, then assume par value = $1,000
Question 23: The 9.98 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $1,053.3. What is the current yield?
Question 24: ABC's bonds have a 9.5 percent coupon and pay interest semi-annually. Currently, the bonds are quoted at 106.315 percent of par value. The bonds mature in 8 years. What is the yield to maturity?
Question 25: ABC has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 13 years; Coupon rate: 11%; Assume semi-annual coupon payments. Calc. price of bond ytm 9.29%