An $8,000 coupon bond with a $400 coupon payment every year has a coupon rate of

A、A 5-year bond with a face value of $1,000 and a coupon rate of 9%, issued that morning and being traded at a price of $1030

B、A 10-year bond with a face value of $1,000 and a coupon rate of 8%, issued on March 22, 2008 and being traded at a price of $980

C、Both of bonds mentioned in A and B

D、None of bonds mentioned in A and B

Bao Capital issues a 4-year semiannual-pay bond with a face value of $10 million and a coupon rate of 10%.The market interest rate is 11% when the bond is issued.The balance sheet liability at the end of the first semiannual period is closestto:

A.$9,650,700.

B.$9,683,250.

C.$9,715,850.

A company had the following events related to $5 million of 10-year bonds with a coupon rate of 8% payable semi-annually on 30 June and 31 December:

Issued on 1 January 2005, when the market rate of interest was 6%.

Bought back in an open market transaction on 1 January 2011, when the market rate of interest rate was 8%.

Which of the following statements best describes the effect of the bond repurchase on the financial statements for 2011? If the company uses the indirect method of calculating the cash from operations, there will be a:

A.$346,511 gain on the income statement.

B.$743,873 gain on the income statement.

C.$350,984 decrease in the cash from operations.

Tiffany Zheng purchased a $1,000 par value, 0% coupon bond with 16 years to maturity one year ago. The YTM (semiannually compounding) was 6.0%. Now one year later, with market rates remaining the same, Zheng purchases an annuity with a semiannual payment of $30 for 15 years. Which of the following gives the closest combined value of the two investments based on the 6% semiannual yield?

A. $1,000.

B. $27.83.

C. $29.46.

A、yield to maturity on a coupon-paying bond maturing at the end of Year 2

B、yield to maturity on a zero-coupon bond maturing at the end of Year 2

C、coupon rate in Year 2 on a coupon-paying bond maturing at the end of Year 4

D、空

The coupon yield rate for a US$2 000 face-value one-year bond paying a yearly nominal interest payment of US$80 and with a market price of US$1 900 is______.

A．3%

B．16%

C．0.0421

D．0.04

Susan Baker is a new hire at Crinson Bank’s Chicago office. She has joined the risk arbitrage desk where she will be training to take advantage of price discrepancies in the U.S. T-note futures and spot markets.

Her managing director, Gerald Bigelow, has asked her to calculate parameters for potential arbitrage opportunities for the bank given current market conditions. At the time he asked the question, the cheapest-to-deliver T-notes were at par, with a coupon rate of 8.5 percent. When trading futures, the risk arbitrage desk borrows at 12 percent and lends at 4 percent.

Looking at the calendar, Baker calculates that there are 184 days to the first coupon payment and 181 days from the first coupon payment to the second. Any interest accrued will be paid when the T-note is delivered against the futures contract, but Bigelow asks Baker not to concern herself in the calculations with the impact of reinvesting the coupons or with transaction costs.

To get a feel for the market, Baker first prices a 6-month futures contract that has 184 days to expiration in a “simplified scenario.” She decides to use the same interest rate for borrowing and lending, taking the average of the bank’s borrowing and lending rates. Calculating the futures price under these simplified assumptions, Baker tells Bigelow that the futures contract should trade at 99.7059. Bigelow explains that the futures price is below par even though the spot price is at par because of the benefit to a short seller of receiving the T-note coupon payments.

Having calculated the futures price in the “simplified scenario,” Baker modifies it to reflect the bank’s current borrowing and lending rates, and calculates the corresponding no-arbitrage bands. She tells Bigelow that the lower band will be at 97.7468. Bigelow checks her calculations, confirming that the higher band will be at 101.6294.

Once they know the no-arbitrage bands for current market conditions, Baker and Bigelow check the screen. They see that the market price of the futures contract for which they’ve been calculating no-arbitrage bands is 103. Together, they execute Baker’s first arbitrage play.

Part 6)

If the bank enters an arbitrage play involving the cheapest-to-deliver Treasury bond, which of the following statements is INCORRECT?

A)The short position decides which bond to deliver.

B)The arbitrage play is no longer risk-free if the bank has a long position in the cheapest-to-deliver bond.

C)The long position has the advantage in the arbitrage play.

D)The cheapest-to-deliver bond may change during the life of the contract.

Holders of domestic U.S. corporate bonds normally receive coupon payments______.

A．once a year

B．twice a year

C．four times a year

D．never—they are all zero-coupon issues

Consider a $100 par value bond. It has a 6% coupon paid annually and 10 years to maturity. The bond is valued at $102.08 today with a discount rate of 5.5%. One day later, the discount rate increases to 6.5%. Assuming the discount rate remains at 6.5% over the remaining life of the bond, the price of the bond between today and maturity will most likely:

A. Decline then remain unchanged.

B. Decline then rise.

C. Rise then decline.