Bond Valuation and Yield to Maturity Quiz
Test your knowledge on bond valuation, YTM, risk, and more with our comprehensive quiz on fixed income topics.
#1
What is the formula for calculating the present value of a bond?
PV = C / (1 + r)^n
PV = C / r
PV = C / (1 - r)^n
PV = C * r * n
#2
Which of the following factors affects the yield to maturity of a bond?
Coupon rate
Par value
Maturity date
All of the above
#3
What is the relationship between bond prices and interest rates?
Inverse
Direct
No relationship
Random
#4
What does a lower yield to maturity indicate?
Higher risk
Lower risk
Higher coupon rate
Longer maturity
#5
If a bond's coupon rate is higher than its yield to maturity, the bond will sell at:
A premium
A discount
Par value
None of the above
#6
What does the term 'callable' refer to in bond terminology?
The bond can be converted into equity
The bond can be redeemed by the issuer before maturity
The bond's interest payments are variable
The bond has a fixed interest rate
#7
Which term refers to the risk associated with changes in interest rates affecting bond prices?
Credit risk
Liquidity risk
Interest rate risk
Market risk
#8
Which of the following bond types carries the highest risk of default?
Treasury bonds
Corporate bonds
Municipal bonds
Agency bonds
#9
Which of the following factors does NOT affect a bond's yield to maturity?
Coupon rate
Par value
Maturity date
Market demand for the bond
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