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Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds

This document contains a 6 question quiz about bonds from a class called MMI1060 Fall 2022. The quiz tests understanding of concepts like which bonds are trading at par value, how interest rates affect bond prices, calculating yield to maturity for zero-coupon bonds, and using spot rates to determine bond prices. Students are asked multiple choice questions to demonstrate their knowledge of these bond valuation topics covered in a recent class.

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46 views4 pages

Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds

This document contains a 6 question quiz about bonds from a class called MMI1060 Fall 2022. The quiz tests understanding of concepts like which bonds are trading at par value, how interest rates affect bond prices, calculating yield to maturity for zero-coupon bonds, and using spot rates to determine bond prices. Students are asked multiple choice questions to demonstrate their knowledge of these bond valuation topics covered in a recent class.

Uploaded by

xtremewhiz
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds 10/15/22, 07:24

MMI1060 Fall 2022 Quiz 5 - Bonds


Started: Oct 15 at 7:23a.m.

Quiz Instructions
Quiz 5 is based on material from class 5 - Bonds

Question 1 1 pts

Which of the following bonds is trading at par:

a bond with a $1,000 face value trading at $1,000

a bond with a $2,000 face value trading at $1,987

a bond with a $1,000 face value trading at $999

a bond with a $2,000 face value trading at $2,012

Question 2 1 pts

Which of the following statements is TRUE?

Bond prices change independently of interest rates.

A fall in interest rates causes a fall in bond prices.

A rise in interest rates causes bond prices to fall.

A fall in bond prices causes interest rates to fall.

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Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds 10/15/22, 07:24

Question 3 1 pts

A zero-coupon bond with a $5,000 face value has ten years to maturity. The
bond currently trades at $3,650. What is the yield to maturity of this bond?
(Note: This is a zero-coupon bond, so you can solve for YTM)

3.465%

3.284%

3.197%

3.699%

Question 4 1 pts

What is the price of a zero-coupon bond with a maturity of 5 years and a face
value of $100 if the yield to maturity is 5%?

$100.00

$68.12

$82.27

$78.35

Question 5 1 pts

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Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds 10/15/22, 07:24

What is the shape of the yield curve given the following spot rates:

1 year: 5%

2 year: 4.6%

3 year: 4.0%

5 year: 3.9%

10 year: 3.75%

Downward sloping yield curve

Upward sloping yield curve

Flat yield curve

Can't determine

Question 6 1 pts

What is the price of a 3 year, 5% annual coupon bond with a face value of
$1,000 based on the following spot rates::

1 year: 5%

2 year: 4.6%

3 year: 4.0%

5 year: 3.9%

10 year: 3.75%

$1,000

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Quiz: MMI1060 Fall 2022 Quiz 5 - Bonds 10/15/22, 07:24

$960.12

$1,111.00

$1,109.43

Quiz saved at 7:23am Submit Quiz

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