#1
What is the formula for calculating the present value of a bond?
PV = C / (1 + r)^n
ExplanationPresent value formula for bonds.
#2
Which of the following factors affects the yield to maturity of a bond?
All of the above
ExplanationMultiple factors impact bond yield to maturity.
#3
What is the relationship between bond prices and interest rates?
Inverse
ExplanationInverse relationship between bond prices and interest rates.
#4
What does a lower yield to maturity indicate?
Higher risk
ExplanationLower yield suggests higher bond risk.
#5
If a bond's coupon rate is higher than its yield to maturity, the bond will sell at:
A premium
ExplanationPremium pricing for bonds with higher coupon rates.
#6
What does the term 'callable' refer to in bond terminology?
The bond can be redeemed by the issuer before maturity
ExplanationCallable bonds can be redeemed early by the issuer.
#7
Which term refers to the risk associated with changes in interest rates affecting bond prices?
Interest rate risk
ExplanationRisk linked to interest rate fluctuations.
#8
Which of the following bond types carries the highest risk of default?
Corporate bonds
ExplanationCorporate bonds have the highest default risk.
#9
Which of the following factors does NOT affect a bond's yield to maturity?
Market demand for the bond
ExplanationMarket demand doesn't directly impact bond yield to maturity.