Finance MCQs

Page No. 28

If coupon rate is less than going rate of interest, then bond will be sold________?


a Seasoned par value


bMore than its par value


cSeasoned par value


dAt par value



Price of an outstanding bond increases when market rate___________?


aNever changes


bIncreases


cDecreases


dEarned


View Answer Decreases

Type of bond which pays interest payment only when it earns is classified as__________?


aIncome bond


bInterest bond


cPayment bond


dEarning bond


View Answer Income bond

An average inflation rate which is expected over life of security is classified as__________?


aInflation premium


bOff season premium


cNominal premium


dRequired premium


View Answer Inflation premium

An inflation rate includes in bond’s interest rates is one which is inflation rate________?


aAt bond issuance


bExpected in future


cExpected at time of maturity


dExpected at deferred call


View Answer Expected in future

A market interest rate for specific type of bond is classified as bond’s_____________?


aRequired rate of return


bRequired option


cRequired rate of redemption


dRequired rate of earning



An outstanding bond are also classified as__________?


aStanding bonds


bOutdated bonds


cDated bonds


dSeasoned bonds


View Answer Seasoned bonds

Coupon rate of convertible bond is_________?


aHigher


bLower


cVariable


dStable


View Answer Lower

An annual interest payment divided by current price of bond is considered as_____________?


aCurrent yield


bMaturity yield


cReturn yield


dEarning yield


View Answer Current yield

Payment divided by par value is classified as______________?


a Divisible payment


bCoupon payment


cPar payment


dPer period payment


View Answer Coupon payment

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