Finance MCQs

Page No. 28

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


a Seasoned par value

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bMore than its par value

✓


cSeasoned par value

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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

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dEarning bond

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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

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dRequired premium

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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

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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

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cRequired rate of redemption

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dRequired rate of earning

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An outstanding bond are also classified as__________?


aStanding bonds

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bOutdated bonds

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cDated bonds

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dSeasoned bonds

✓


View Answer Seasoned bonds

Coupon rate of convertible bond is_________?


aHigher

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bLower

✓


cVariable

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dStable

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View Answer Lower

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


aCurrent yield

✓


bMaturity yield

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cReturn yield

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dEarning yield

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View Answer Current yield

Payment divided by par value is classified as______________?


a Divisible payment

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bCoupon payment

✓


cPar payment

✖


dPer period payment

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View Answer Coupon payment

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