金融市场与机构(10)

1、Chapter10TheBondMarketMultipleChoiceQuestions1. Comparedtomoneymarketsecurities,capitalmarketsecuritieshave(a) moreIiquidity.(b) longermaturities.(c) loweryields.(d) lessrisk.Answer：B2. (I)Securitiesthathaveanoriginalmaturitygreaterthanoneyeararetradedincapitalmarkets.(II)Thebestknowncapitalmarketse

2、curitiesarestocksandbonds.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) BotharefaIse.Answer：C3. (I)Securitiesthathaveanoriginalmaturitygreaterthanoneyeararetraded1 nmoneymarkets.(11) Thebestknownmoneymarketsecuritiesarestocksandbonds.(a) (I)istrue,(II)false.)(b) (I)isfalse,(II)

3、true.(c) Botharetrue.(d) Botharefalse.Answer:D4. (I)FirmsandindividuaIsusethecapitalmarketsforlong-terminvestments.(II)ThecapitalmarketsprovideanalternativetoinvestmentinassetssuchasreaIestateandgold.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer：C5. Theprima

4、ryreasonthatindividualsandfirmschoosetoborrowlong-termistoreducetheriskthatinterestrateswillbeforetheypayofftheirdebt.(a) rise(b) faII(c) becomemorevolatiIe(d) becomemorestableAnswer:A&6. Afirmthatchoosestofinanceanewplantbyissuingmoneymarketsecurities(a) mustincurthecostofissuingnewsecuritiesto

5、rolIoveritsdebt.(b) runstheriskofhavingtopayhigherinterestrateswhenitrollsoveritsdebt.(c) incursboththecostofreissuingsecuritiesandtheriskofhavingtopayhigherinterestratesonthenewdebt.(d) ismorelikelytoprofitifinterestratesrisewhiletheplantisbeingconstructed.Answer:C7. Theprimaryreasonthatindividuals

6、andfirmschoosetoborrowlong-termisto(a) reducetheriskthatinterestrateswillfaIIbeforetheypayofftheirdebt.(b) reducetheriskthatinterestrateswillrisebeforetheypayofftheirdebt.(c) reducemonthlyinterestpayments,asinterestratestendtobehigheronshort-termthanIong-termdebtinstruments.(d) reducetotaIinterestpa

7、ymentsovertheIifeofthedebt.Answer:B8. Afirmwillborrowlong-term(a) iftheextrainterestcostofborrowinglong-termislessthantheexpectedcostofrisinginterestratesbeforeitretiresitsdebt.(b) iftheextrainterestcostofborrowingshort-termduetorisinginterestratesdoesnotexceedtheexpectedpremiumthatispaidforborrowin

8、glongterm.(c) ifshort-terminterestratesareexpectedtodeciineduringthetermofthedebt.&(d) iflong-terminterestratesareexpectedtodeciineduringthetermofthedebt.Answer:A(a) thefederaI(b) thefederaI(c) thefederaIandIocaIandIocaIandIocaI(d) IocaIernments,er

9、nments,corporations,andfinancialinstitutions.corporations.Answer:B10.Governmentsneverissuestockbecause(a)theycannotseiIownershipclaims,(b)theConstitutionexpresslyforbidsit.(c)both(a)and(b)oftheabove,(d)neither(a)nor(b)oftheabove.Answer:A11. (I)TheprimaryissuersofcapitalmarketsecuritiesarefederaIandl

10、ocalgovernments,andcorporations.(II)GovernmentsneverissuestockbecausetheycannotseIIownershipclaims.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer：C12. (I)Theprimaryissuersofcapitalmarketsecuritiesarefinancialinstitutions.(11) Thelargestpurchasersofcapitalmark

11、etsecuritiesarecorporations.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) BotharefaIse.Answer:D13. Thedistributionofafirm'scapitalbetweendebtandequityisits(a) leverageratio.(b) liabilitystructure(c) acidratio.(d) capitalstructure.¥Answer:D14. Thelargestpurchasersofcapi

12、talmarketsecuritiesare(a) households.(b) corporations(c) governments.(d) centralbanks.Answer:A15. Individualsandhouseholdsfrequentlypurchasecapitalmarketsecuritiesthroughfinancialinstitutionssuchas(a) mutualfunds.(b) pensionfunds.(c) moneymarketmutuaIfunds.(d) alIoftheabove.(e) only(a)and(b)oftheabo

13、ve.Answer：E16. (I)TherearetwotypesofexchangesinthesecondarymarketforcapitaIsecurities:organizedexchangesandover-the-counterexchanges.(II)WhenfirmsseiIsecuritiesfortheveryfirsttime,theissueisaninitialpubIicoffering,(a)(I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer

14、:C17. (I)CapitalmarketsecuritiesfaIIintotwocategories:bondsandstocks.(II)Long-termbondsincIudegovernmentbondsandlong-termnotes,municipalbonds,andcorporatebonds.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer：B18. Thevalueofabondistheamountthattheissuermustpaya

15、tmaturity.(a)market(b)present(c)discounted(d)faceAnswer:D19. Therateistherateofinterestthattheissuermustpay.(a) market(b) coupon(c) discount(d) fundsAnswer:B20. (I)Thecouponrateistherateofinterestthattheissuerofthebondmustpay.(II)Thecouponrateisusuallyfixedforthedurationofthebondanddoesnotfluctuatew

16、ithmarketinterestrates.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer：C21. (I)Thecouponrateistherateofinterestthattheissuerofthebondmustpay.(II)Thecouponrateonoldbondsfluctuateswithmarketinterestratessotheywillremainattractivetoinvestors.(a) (I)istrue,(II)fal

17、se.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer:A22. Treasurybondsaresubjecttoriskbutarefreeofrisk.(a) default;interest-rate(b) default;underwriting(c) interest-rate;default(d) interest-rate;underwriting¥Answer：C23. ThepricesofTreasurynotes,bonds,andbillsarequoted(a) asaperce

18、ntageofthecouponrate.(b) asapercentageofthepreviousday*sclosingvalue.(c) asapercentageof$100facevalue.(d) asamultipleoftheannuaIinterestpaid.Answer:C24. ThesecuritywiththelongestmaturityisaTreasury(a) note.(b) bond.(c) acceptance.(d) bill.Answer：B25. (I)Tosellanoldbondwheninterestrateshaverisen,theh

19、olderwillhavetodiscountthebonduntiItheyieldtothebuyeristhesameasthemarketrate.(II)TheriskthatthevaIueofabondwillfaIIwhenmarketinterestratesriseiscalledinterest-raterisk.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer：C26. ToseIIanoldbondwheninterestrateshave,t

20、heholderwillhavetothepriceofthebonduntiItheyieldtothebuyeristhesameasthemarketrate.(a) risen;lower(b) risen;raise(c) faIlen;lower(d) risen;inflate(Answer:A27. Mostofthetime,theinterestrateonTreasurynotesandbondsisthatonmoneymarketsecuritiesbecauseofrisk.(a) above;interest-rate(b) above;default(c) be

21、low;interest-rate(d) below;defaultAnswer：A28. (I)Inmostyearstherateofreturnonshort-termTreasurybillsisbeIowthatonthe20-yearTreasurybond.(II)InterestratesonTreasurybillsaremorevolatilethanratesonlong-termTreasurysecurities.I(a)(I)istrue,(II)false,(b)(I)isfalse,(II)true,(c)Botharetrue,(d)Botharefalse.

22、Answer:C29. (I)BecauseinterestratesonTreasurybillsaremorevolatiIethanratesonlong-termsecurities,thereturnonshort-termTreasurysecuritiesisusuaIlyabovethatonlonger-termTreasurysecurities.(11) ATreasurySTRIPseparatestheperiodicinterestpaymentsfromthefinalprincipalrepayment.(a) (I)istrue,(II)false.(b) (

23、I)isfalse,(II)true.(c) Botharetrue.(d) BotharefaIse.Answer:B30. WhichofthefoIIowingstatementsaboutTreasuryinfIation-indexedbondsisnottrue(a) Theprincipalamountusedtocomputetheinterestpaymentvarieswiththeconsumerpriceindex.(b) Theinterestpaymentriseswheninflationoccurs.(c) Theinterestrateriseswheninf

24、lationoccurs.(d) Atmaturitythesecuritiespaythegreaterofface-valueorinflation-adjustedprincipal.Answer：C31. Theinterestratesongovernmentagencybondsare(a) almostidenticaltothoseavaiIableonTreasurysecuritiessinceitisuniikelythatthefederaIgovernmentwouldpermititsagenciestodefaultontheirobiigations.(b) s

25、ignificantlyhigherthanthoseavaiIableonTreasurysecuritiesduetotheirlowliquidity.(c) significantlylowerthanthoseavaiIableonTreasurysecuritiesbecauseagencyinterestpaymentsaretaxexempt.(d) significantlylowerthanthoseavaiIableonTreasurysecuritiesbecausetheinterest-rateriskonagencysecuritiesislowerthantha

26、tonTreasurysecurities.Answer：B32. (I)MunicipalbondsthatareissuedtopayforessentialpubIicprojectsareexemptfromfederaItaxation.(II)GeneralobiigationbondsdonothavespecificassetspledgedassecurityoraspecificsourceofrevenueaIlocatedfortheirrepayment.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.(c) Botha

27、retrue.(d) Botharefalse.Answer:C33. (I)Mostcorporatebondshaveafacevalueof$1000,payinterestsemi-annually,andcanberedeemedanytimetheissuerwishes.(II)Registeredbondshavenowbeenlargelyreplacedbybearerbonds,whichdonothavecoupons.(a) (I)istrue,(II)false.(b) (I)isfalse,(II)true.>(c) Botharetrue.(d) Both

28、arefalse.Answer:A34. Thebondcontractthatstatesthelender'srightsandprivilegesandtheborrower*sobiigationsiscalledthe(a) bondsyndicate.(b) restrictivecovenant.(c) bondcovenant.(d) bondindenture.IAnswer：D35. Policiesthatlimitthediscretionofmanagersasawayofprotectingbondholders*interestsarecalled(a)

29、restrictivecovenants.(b) debentures.(c) sinkingfunds.(d) bondindentures.Answer：A36. Typically,theinterestrateoncorporatebondswiIIbethemorerestrictionsareplacedonmanagementthroughrestrictivecovenants,because(a) higher;corporateearningswillbeIimitedbytherestrictions(b) higher;thebondswillbeconsidereds

30、aferbybondholders(c) lower;thebondswiIIbeconsideredsaferbybuyers(d) lower;corporateearningswillbehigherwithmorerestrictionsinplaceAnswer：C37. Restrictivecovenantscan(a) Iimittheamountofdividendsthefirmcanpay.(b) Iimittheabilityofthefirmtoissueadditionaldebt.I(c) restricttheabilityofthefirmtoenterint

31、oamergeragreement.(d) doalIoftheabove.(e) doonly(a)and(b)oftheabove.Answer：D38. (I)RestrictivecovenantsoftenIimittheamountofdividendsthatfirmscanpaythestockholders.(II)MostcorporateindenturesincIudeacalIprovision,whichstatesthattheissuerhastherighttoforcetheholdertoseiIthebondback.(a) (I)istrue,(II)

32、false.(b) (I)isfalse,(II)true.(c) Botharetrue.(d) Botharefalse.Answer:C39. CaIIprovisionswiIIbeexercisedwheninterestratesandbondvalues(a)rise;rise(b)fall;rise(c)rise;faII(d)fall;fallAnswer:B40. Arequirementinthebondindenturethatthefirmpayoffaportionofthebondissueeachyeariscalled(a) asinkingfund.(b)

33、acalIprovision.(c) arestrictivecovenant.(d) ashelfregistration.Answer：A41. (I)CalIablebondsmusthaveahigheryieldthancomparablenoncalIablebonds.(11) ConvertiblebondsareattractivetobondholdersandseiIforahigherpricethancomparablenonconvertiblebonds.(a) (I)istrue,(II)false.I(b) (I)isfalse,(II)true.(c) Bo

34、tharetrue.(d) Botharefalse.Answer：C42. Long-termunsecuredbondsthatarebackedonlybythegeneraIcreditworthinessoftheissuerarecalled(a) junkbonds.(b) callablebonds.(c) convertiblebonds.(d) debentures.Answer：D43. Asecuredbondisbackedby(a) thegeneraIcreditworthinessoftheborrower.(b) aninsurancecompany'

35、sfinancialguarantee.(c) theexpectedfutureearningsoftheborrower.(d) specificcollateral.Answer:D44. Financialguarantees(a) areinsurancepoliciestobackbondissues.(b) arepurchasedbyfinanciallyweakersecurityissuers.(c) lowertheriskofthebondscoveredbytheguarantee.(d) doalIoftheabove.(e) doonly(a)and(b)ofth

36、eabove.Answer:D45. CorporatebondsarelessriskyiftheyarebondsandmunicipaIbondsarelessriskyiftheyarebonds.(a) secured;revenue(b) secured;generalobiigation(c) unsecured;revenue(d) unsecured;generaIobiigationAnswer:B46. WhichofthefoIIowingaretrueforthecurrentyield(a) Thecurrentyieldisdefinedastheyearlyco

37、uponpaymentdividedbythepriceofthesecurity.(b) Theformulaforthecurrentyieldisidenticaltotheformuladescribingtheyieldtomaturityforadiscountbond.(c) Thecurrentyieldisalwaysapoorapproximationfortheyieldtomaturity.(d) AlIoftheabovearetrue.(e) Only(a)and(b)oftheabovearetrue.Answer：A47. Thenearerabond'

38、spriceistoitsparvalueandthelongerthematurityofthebondthemorecloselyapproximates(a) currentyield;yieldtomaturity.(b) currentyield;couponrate.(c) yieldtomaturity;currentyield.(d) yieldtomaturity;couponrate.Answer：A48. WhichofthefoIIowingaretrueforthecurrentyield(a) Thecurrentyieldisdefinedastheyearlyc

39、ouponpaymentdividedbythepriceofthesecurity.(b) Thecurrentyieldandtheyieldtomaturityalwaysmovetogether.(c) Theformulaforthecurrentyieldisidenticaltotheformuladescribingtheyieldtomaturityforadiscountbond.(d) AlIoftheabovearetrue.(e) Only(a)and(b)oftheabovearetrue,iAnswer:E49. Thecurrentyieldisalessacc

40、urateapproximationoftheyieldtomaturitythethetimetomaturityofthebondandthethepriceisfrom/totheparvalue.(a) shorter;closer(b) shorter;farther(c) longer;closer(d) longer;fartherAnswer：B50. Thecurrentyieldona$6,000,10percentcouponbondsellingfor$5,000is(a) 5percent.(b) 10percent.(c) 12percent.(d) 15perce

41、nt.Answer:C51. Thecurrentyieldona$5,000,8percentcouponbondsellingfor$4,000is(a) 5percent.(b) 8percent.(c) 10percent.(d) 20percent.(e) noneoftheabove.Answer：C52. Foraconsol,thecurrentyieldisanoftheyieldtomaturity.(a) underestimate(b) overestimate(c) approximatemeasure)(d) exactmeasureAnswer:D53. Whic

42、hofthefoIIowingaretrueoftheyieldonadiscountbasisasameasureoftheinterestrate(a) Itusesthepercentagegainonthefacevalueofthesecurity,ratherthanthepercentagegainonthepurchasepriceofthesecurity.(b) ItputstheyieldontheannuaIbasisofa360-dayyear.(c) Itignoresthetimetomaturity.(d) AlIoftheabovearetrue.(e) On

43、ly(a)and(b)oftheabovearetrue.Answer:E54. Theformulaforthemeasureoftheinterestratecalledtheyieldonadiscountbasisispeculiarbecause(a) itputstheyieldontheannuaIbasisofa360-dayyear.(b) itusesthepercentagegainonthepurchasepriceofthebill.(c) itignoresthetimetomaturity.(d) both(a)and(b)oftheabove.(e) both(

44、a)and(c)oftheabove.Answer：A)55. Theyieldonadiscountbasisofa180-day$1,000Treasurybillsellingfor$950is(a) 10percent.(b) 20percent.(c) 25percent.(d) 40percent.Answer:A56. Theyieldonadiscountbasisofa90-day$1,000Treasurybillsellingfor$950is(a) 5percent.(b) 10percent.(c) 15percent.(d) 20percent.(e) noneof

45、theabove.Answer:D57. Theyieldonadiscountbasisofa90-day$1,000Treasurybillsellingfor$900is(a) 10percent.(b) 20percent.$(c) 25percent.(d) 40percent.Answer：D58. Theyieldonadiscountbasisofa180-day$1,000Treasurybillsellingfor$900is(a) 10percent.(b) 20percent.(c) 25percent.(d) 40percent.Answer：B59. Whenano

46、ldbond*smarketvalueisaboveitsparvaluethebondisseiIingataThisoccursbecausetheoldbond,scouponrateisthecouponratesofnewbondswithsimilarrisk.(a) premium;below(b) premium;above(c) discount;beIow(d) discount;aboveAnswer：BTreasurynotesisbeIowthatonmoneydefaultrisk.foressentialpubIicprojectsareexemptrathert

47、hangeneraIobiigationbonds.of$1000,aresoldatadiscount,andcanreplacedbybearerbonds,whichdonotbondindenturethatthefirmpayoffaTrue/False1. TheprimaryissuersofcapitaImarketsecuritiesareIocaIgovernmentsandcorporations.Answer：FALSE2. CapitaImarketsecurutiesarelessliquidandhavelongermaturitiesthanmoneymarke

48、tsecurities.Answer:TRUE3. GovernmentsneverissuestockbecausetheycannotseiIownershipclaims.Answer:TRUE4. Tosellanoldbondwhenrateshaverisen,theholderwillhavetodiscountthebonduntiItheyieldtothebuyeristhesameasthemarketrate.Answer:TRUE5. Mostofthetime,theinterestrateonmarketsecuritiesbecauseoftheirlowAnswer：FAL