Bond Valuation and Factors Influencing Prices Quiz
Explore bond pricing, interest rate impact, formulas, and risks. Test your knowledge with our Bond Valuation Quiz!
#1
Which of the following factors affects bond prices?
Market interest rates
Bond issuer's credit rating
Maturity date of the bond
All of the above
#2
What is the relationship between bond prices and interest rates?
Inverse
Direct
No relationship
Random
#3
What is the term for the total amount of interest paid annually by a bond?
Coupon rate
Yield to maturity (YTM)
Current yield
Bond's face value
#4
Which of the following is NOT a factor influencing bond prices?
Inflation expectations
Government regulations
Issuer's financial health
Market liquidity
#5
Which bondholder typically receives higher interest payments?
Bondholder of a government bond
Bondholder of a corporate bond
Bondholder of a municipal bond
Bondholder of a zero-coupon bond
#6
What is the formula to calculate the present value of a bond?
PV = C / (1 + r)^n
PV = C * (1 - (1 + r)^-n) / r
PV = C * (1 + r)^n
PV = C * r / (1 - (1 + r)^-n)
#7
What is the term for the rate of return an investor earns from a bond?
Yield to maturity (YTM)
Coupon rate
Current yield
Nominal rate
#8
What is the primary determinant of a bond's coupon rate?
Market demand for the bond
Bond issuer's credit rating
Current market interest rates
Bond's maturity date
#9
What happens to bond prices when interest rates rise?
Bond prices rise
Bond prices fall
Bond prices remain unchanged
Bond prices fluctuate randomly
#10
What is the term for the period until the bond issuer returns the principal to the bondholder?
Coupon period
Maturity date
Issue date
Redemption period
#11
Which bond has higher interest rate risk?
A bond with a longer maturity
A bond with a shorter maturity
Both have equal interest rate risk
Depends on the coupon rate
#12
What is the key feature of a zero-coupon bond?
It pays no interest
It has a variable interest rate
It has a floating maturity date
It has a high coupon rate
#13
What is the term for the increase in a bond's value as it approaches its maturity date?
Yield to maturity
Premium
Discount
Accretion
#14
What is the term for the risk that a bond issuer will fail to make interest payments or repay the principal amount?
Credit risk
Interest rate risk
Market risk
Inflation risk
#15
What is the term for a bond's yield calculated to its maturity date?
Nominal yield
Real yield
Yield to maturity (YTM)
Current yield
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