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Q 1/10
Score 0
An investor purchases a corporate bond with principal value of € 10,000. Time to maturity is 10 years and the annual coupon payments are € 400. The current market interest rate is 2%.
60
The bond is traded at par
The bond is traded at a discount
The bond is traded at premium
Q 2/10
Score 0
The holder of a zero coupon bond receives only one coupon payment, at the end of maturity.
30
False
True
10 questions
Q.
An investor purchases a corporate bond with principal value of € 10,000. Time to maturity is 10 years and the annual coupon payments are € 400. The current market interest rate is 2%.
1
60 sec
Q.
The holder of a zero coupon bond receives only one coupon payment, at the end of maturity.
2
30 sec
Q.
Zero-coupon Treasury securities with maturities longer than one year also trade in the bond market are called STRIPS
3
30 sec
Q.
Pure discount bonds are also called zero bonds.
4
30 sec
Q.
Eurobonds are denominated in Euros.
5
30 sec
Q.
A bond rated BBB and above by Standards&Poor, Baa and above by Moody's or unrated
6
30 sec
Q.
A negative relation exists between bond prices and bond yields.
7
30 sec
Q.
Credit spreads are higher for bonds with greater default risk.
8
30 sec
Q.
Credit spreads are higher for bonds with high ratings.
9
30 sec
Q.
An investor purchases a corporate bond with principal value of € 100. Time to maturity is 2 years and the annual coupon payments are € 5.75. The current market interest rate is 2%. The bond has a triple C credit rating. The bond is investment grade and therefore classed as a Junk bond.
