15 Questions in Quiz - Financial Institutions and Markets | FINA 365, Quizzes of Financial Market

Download 15 Questions in Quiz - Financial Institutions and Markets | FINA 365 and more Quizzes Financial Market in PDF only on Docsity! Question 1 Commercial paper with a maturity exceeding _______ must be registered with the SEC. 270 days Question 2 Ron Burgundy purchased an NCD a year ago in the secondary market for $980,000. He redeems it today and receives $1,000,000. He also receives interest of $30,000. The investor’s annualized yield on this investment is _______ percent. 5.10 Question 3 If the coupon rate _______ the required rate of return, the price of a bond _______ par value. equals; equals Question 4 Mr. Kamikaze can purchase an annual bond with 15 years until maturity, a par value of $1,000, and a 9 percent annualized coupon rate for $1,100. Mr. Kamikaze's yield to maturity is _______ percent. 7.84 Question 5 An annual bond with a $1,000 par value has an 8 percent annual coupon rate, and 4 years until maturity. Given that annual yield on similar bonds is 6 percent, approximately, what should be the current price of this bond? 1,069.30 Question 6 A ten-year, inflation-indexed bond (ie. TIPS) has a par value of $10,000 and an annual coupon rate of 5 percent. During the first six months since the bond was issued, the inflation rate was 2 percent. Based on this information, the coupon payment after six months will be $_______. 255 Question 7 Assume that the price of a $1,000 zero coupon bond with five years to maturity is $567 when the required rate of return is 12 percent. If the required rate of return suddenly changes to 15 percent, approximately, what is the price elasticity of the bond? - 0.493 Question 8 A repurchase agreement calls for an investor to buy securities for $4,925,000 and sell them back in 60 days for $5,000,000. What is the yield (or repo rate) on this repurchase agreement?