bonds and bonds valuation

mcqspedia.com has 83 Question/Answers about Topic bonds and bonds valuation

Bonds issued by corporations and exposed to default risk are classified as

Bonds issued by corporations and exposed to default risk are classified as
  • A. corporation bonds
  • B. default bonds
  • C. risk bonds
  • D. zero risk bonds
  • Correct Answer: Option A

Bonds issued by government and backed by U.S government are classified as

Bonds issued by government and backed by U.S government are classified as
  • A. issued security
  • B. treasury bonds
  • C. U.S bonds
  • D. return security
  • Correct Answer: Option B

Value generally promises to pay at maturity date and a firm borrows is considered as bonds

Value generally promises to pay at maturity date and a firm borrows is considered as bonds
  • A. bond value
  • B. per value
  • C. state value
  • D. par value
  • Correct Answer: Option D

Bonds having zero default risk are classified as

Bonds having zero default risk are classified as
  • A. U.S bonds
  • B. return security
  • C. issued security
  • D. treasury bonds
  • Correct Answer: Option D

Required rate of return in calculating bond’s cash flow is also classified as

Required rate of return in calculating bond’s cash flow is also classified as
  • A. going rate of return
  • B. yield
  • C. earning rate
  • D. Both A and B
  • Correct Answer: Option D

Bonds that can be converted into shares of common stock are classified as

Bonds that can be converted into shares of common stock are classified as
  • A. convertible bonds
  • B. stock bonds
  • C. shared bonds
  • D. common bonds
  • Correct Answer: Option A

Rate of return (in percentages) is consists of

Rate of return (in percentages) is consists of
  • A. capital gain yield interest yield
  • B. return yield + stable yield
  • C. return yield + instable yield
  • D. par value + market value
  • Correct Answer: Option A

Market in which bonds are traded over-the-counter than in an organized exchange is classified as

Market in which bonds are traded over-the-counter than in an organized exchange is classified as
  • A. organized markets
  • B. trade markets
  • C. counter markets
  • D. bond markets
  • Correct Answer: Option D

Bond which is offered below its face value is classified as

Bond which is offered below its face value is classified as
  • A. present value bond
  • B. original issue discount bond
  • C. coupon issued bond
  • D. discounted bond
  • Correct Answer: Option B

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

An annual interest payment divided by current price of bond is considered as
  • A. current yield
  • B. maturity yield
  • C. return yield
  • D. earning yield
  • Correct Answer: Option A

Coupon rate of convertible bond is

Coupon rate of convertible bond is
  • A. higher
  • B. lower
  • C. variable
  • D. stable
  • Correct Answer: Option B

An unsecured bond that provides no lien against property as security for bond obligation is classified as

An unsecured bond that provides no lien against property as security for bond obligation is classified as
  • A. secured bond
  • B. debenture
  • C. obligation bond
  • D. specific bond
  • Correct Answer: Option B

Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as

Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as
  • A. payment in-kind bonds
  • B. payment off-kind bonds
  • C. kind payment
  • D. additional bond
  • Correct Answer: Option A

Type of bond which pays interest payment only when it earns is classified as

Type of bond which pays interest payment only when it earns is classified as
  • A. income bond
  • B. interest bond
  • C. payment bond
  • D. earning bond
  • Correct Answer: Option A

Bonds issued by small companies tend to have

Bonds issued by small companies tend to have
  • A. high liquidity premium
  • B. high inflation premium
  • C. high default premium
  • D. high yield premium
  • Correct Answer: Option A

Coupon rate of bond is also called

Coupon rate of bond is also called
  • A. nominal rate
  • B. premium rate
  • C. quoted rate
  • D. both a and c
  • Correct Answer: Option D

Falling interest rate leads change to bondholder income which is

Falling interest rate leads change to bondholder income which is
  • A. reduction in income
  • B. increment in income
  • C. matured income
  • D. frequent income
  • Correct Answer: Option A

An increasing in interest rate leads to decline in value of

An increasing in interest rate leads to decline in value of
  • A. junk bonds
  • B. outstanding bonds
  • C. standing bonds
  • D. premium bonds
  • Correct Answer: Option B

Tax free bonds issue for welfare by industrial agencies or pollution control agencies are classified as

Tax free bonds issue for welfare by industrial agencies or pollution control agencies are classified as
  • A. agent bonds
  • B. development bonds
  • C. pollution control bonds
  • D. Both B and C
  • Correct Answer: Option D

Indexed bonds that are issued by linking payments to inflation are classified as

Indexed bonds that are issued by linking payments to inflation are classified as
  • A. treasury inflation protected securities
  • B. premium protected securities
  • C. risk protected securities
  • D. liquidity protected securities
  • Correct Answer: Option A
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