Consider a $1,000 par value 20-year zero coupon bond issued at a yield tomaturity of 10%. If you buy that bond when it is issued and continue to hold the bond asyields decline to 9%, the imputed interest income for the first year of that bond is（）

rs. If the bond is currently selling for $980.74, the YTM isclosest to:

A.8.28%

B.7.28%

C.6.28%

A.8.37%.

B.8.29%.

C.7.41%.

In Figure 3. 2 A, consider an officially declared “par value” is $2.00 per pound, its market-clearing rate is＄1.60 per pound. British officials have announced that they will support the pound at 1 percent below par(about $1.98)and the dollar at 1 percent above par(about $2.02. In Figure 3.2A, the official are forced to make good on this pledge by officially intervening in the foreign exchange market： buying ￡50 billion, and ()。

A、buying $99 billion (equal to ￡ 50 billion times $1. 98 per pound)

B、selling $99 billion (equal to ￡ 50 billion times $1. 98 per pound)……

C、buying 50 billion dollars

D、selling 50 billion dollars

Consider a 5-year option-free bond that is priced at a discount to par value. Assuming the

discount rate does not change, one year from now the value of the bond will most likely:

A、increase.

B、decrease.

C、Stay the same.

A、Decreases then increases

B、Increases then decreases

C、Decreases then remains unchanged

A、Increases then decreases

B、Decreases then increases

C、Decreases then remains unchanged

Consider a $/00 par value bond with a 7% coupon paid annually and 5 years to maturity At a discount rate of 65% the value of the bond today is $102.08 One day later the discount rate increases to 75%

A、Decreases then remains unchanged

B、Decreases then increases

C、Increases then decreases

ity. 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.

Use the following information to answer Questions 10 and 11.

Consider $1,000,000 par value, 10-year, 6.5% coupon bonds issued on January 1, 2005. The bonds are callable and there is a sinking fund

A、An investor would benefit from having his bonds called under the provision of the sinking fund.

B、An investor will receive a premium if the bond is redeemed prior to maturity under the provision of the sinking fund.

C、The bonds do not have an accelerated sinking fund provision.

In Figure 3. 2 A (在图表3.2 A中), consider an officially declared “par value” is $2.00 per pound(假设官方宣布的“平价”汇率为每英镑2美元), its market-clearing rate is＄1.60 per pound(英镑的市场出清价格1.6美元). British officials have announced that they will support the pound at 1 percent below par(about $1.98)and the dollar at 1 percent above par(about $2.02)(英国官方已宣布其将在平价的1%以下(约为1.98美元)支持英镑,在平价的1%以上(约为2.02美元)支持美元). In Figure 3.2A, the official are forced to make good on this pledge by officially intervening in the foreign exchange market： buying ￡50 billion, and ()（政府当局被迫通过对外汇市场的干预来履行这一承诺具体做法是在外汇市场中买入500亿英镑, 同时())。

A、buying $99 billion (equal to ￡ 50 billion times $1. 98 per pound)

B、selling $99 billion (equal to ￡ 50 billion times $1. 98 per pound)

C、buying 50 billion dollars

D、selling 50 billion dollars