ASSET VALUATION DEBT INVESTMENTS ANALYSIS AND VALUATION--CFA真题及解答 ASSET VALUATION DEBT INVESTMENTS ANALYSIS AND VALUATION.doc

Asset Valuation: Debt Investments: Analysis and Valuation 1.A: Introduction to the Valuation of Fixed Income Securities Question ID: 12975 What is the present value of a three-year security that pays a fixed annual coupon of 6 percent using a discount rate of 7 percent? A. 92.48. B. 97.38. C. 100.00. D. 101.75. B This value is computed as follows: Present Value = 6/1.07 + 6/1.072 + 106/1.073 = 97.38 The value 92.48 results if the coupon payment at maturity of the bond is neglected. The coupon rate and the discount rate are not equal so 100.00 cannot be the correct answer. Question ID: 13009 If a bonds coupon is greater than the prevailing market rate on new issues, the bond is called a: A. par bond. B. term bond. C. premium bond. D. discount bond. C Question ID: 22342 By purchasing a noncallable, nonputable, U.S. Government 30-year bond, an investor is entitled to: A. annuity of coupon payments. B. monthly payments depending on the principal prepayment behavior of individual homeowners. C. annuity of coupon payments plus recovery of principal at maturity. D. full recovery of face value at maturity or when the bond is retired. C Bond investors are entitled to two distinct types of cash flows: (1) the periodic receipt of coupon income over the life of the bond, and (2) the recovery of principal (or face value) at the end of the bond’s life. Question ID: 13010 Using the present-value method, which of the following is NOT needed to value a bond? A. Coupon payment. B. Term to maturity. C. Par value. D. Bond rating. D Question ID: 13011 The value of a bond is NOT affected by: A. current yield. B. coupon rate. C. required rate of return. D. year to maturity. A Question ID: 22343 Which of the following is NOT one of the steps in a valuation process for a noncallable bond? A. Estimate the bonds cash flows. B. Calculate the present value of the estimated cash flows. C. De