【導(dǎo)讀】A.11%.B.9%.C.8%.D.10%.$90/$1,087==8%.A.isyielding10%.D.istradingata10%premium.90%of$1,or$.A.$.B.$.C.$.D.$.couponpayment?A.$.B.$.C.$.D.$.A.$.B.$9,.C.$10,.D.$9,.[(96+27/32)/100]x10,000=$9,A.%.B.%.C.%.D.%.PurchasePrice=[(105+16/32)/100]x10,000=$10,Sellingprice=[(105+16/32)/100]x10,000=$10,A.atparvalue.B.atadiscount.D.atapremium.opportunity.

　　

【正文】 or general redemption price. Bonds redeemed at par are redeemed at the special redemption price. Question ID: 20205 When bonds are called at a premium, what is the relationship of price to the par value, and what is the term used to describe the redemption price? A. Above par, special redemption price. B. Equal to par, regular redemption price. C. Equal to par, special redemption price. D. Above par, regular redemption price. D When bonds are called at a premium, the issuer redeems them at a price above par, or the regular or general redemption price. Bonds redeemed at par are redeemed at the special redemption price. Question ID: 20202 Which of the following examples of an embedded option does NOT favor the bondholder? A. Put option. B. Interest rate floor. C. Conversion provision. D. Call option. D A call option gives the issuer of bonds the right to redeem the issue at a date prior to maturity, at a predetermined price. The issuer has the choice of whether or not to call the bond. A call option is the opposite of a put option, which benefits the bondholder by giving him the right to sell the bond to the issuer at what is known as the ―put price,‖ at certain dates prior to maturity. An interest rate floor benefits the holder by providing a lower limit (or minimum) on the interest rate the bondholder will receive. A conversion provision gives the holder the option of converting the bond to mon stock, and the holder can decide whether conversion is advantageous. Question ID: 20203 Which of the following statements about call options (on bonds) is TRUE? A. The call price is determined by the conversion ratio. B. The call price is usually set below the par value of the bonds. C. The issuer is likely to call the bond when the market value is above the call price. D. The call option on debt can trade separately from the bond. C A market value above the call price likely indicates that interest rates have decreased, and the issuer can replace existing debt with lower cost debt. Thus, the issuer will likely call the bond. Embedded options in bonds (of which a call option is an example) are inseparable from the underlying bond and trade with that bond. The conversion price is determined by the conversion ratio (the number of shares into which each bond is convertible). The call price is usually set above the par value of the bonds. Question ID: 20201 Which of the following examples of an embedded option does NOT favor the bond issuer? A. Prepayment right granted to the borrower of loans underlying amortizing securities. B. Call option. C. Interest rate cap. D. Put option. D A put option benefits the bondholder by giving him the right to sell the bond to the issuer at what is known as the ―put price,‖ at certain dates prior to maturity. A put option is the opposite of a call option, which gives the issuer of bonds the right to redeem the issue at a date prior to maturity, at a predetermined price. An interest rate cap benefits the issuer by providing an upper limit (or maximum) on the interest rate. An example of an amortizing security is a mortgage loan. To understand why the repayment right granted to the borrower of loans underlying amortizing securities benefits the issuer, remember that the issuer here is the homeowner. The bank acts as a passthrough from the homeowner to the owner of a bond collateralized by the loan. The right to prepay if interest rates decrease is a benefit to the homeowner. If the homeowner prepays, the holder of the bond has reinvestment risk. Question ID: 13623 Which of the following statements is TRUE with regard to a call provision? A. A call provision will benefit the issuer in times of declining interest rates. B. An issue with a call provision will trade at a higher price than an identical issue with no call provision. C. A call provision is a disadvantage to the bondholder in periods of rising interest rates. D. A call provision is an advantage to the bondholder. A A call provision gives the bond issuer the right to call the bond at a prespecified strike price. A bond issuer will wish to call a bond if he is paying a high coupon and interest rates have, in general, decreased so that he would be able to get cheaper financing in the market than he is able to get with the current bond issue. Question ID: 20204 Under which of the following scenarios will the option on the fixedine security most likely be exercised? A. An investor purchased a 30year bond with a put option priced to yield %. The market value is currently above par value. B. Passage Ltd. has $100 million in bonds outstanding with an accelerated sinking fund provision. The market value of the bonds is currently below par. C. Fahr, Inc., issued % freely callable bonds. Presently, Fahr could issue similar bonds at %. D. A homeowner has an % fixed rate mortgage. Rates on similar term mortgages are now at %. D The homeowner is likely to exercise his option to refinance the loan with a new loan at a lower interest rate. Fahr, Inc., is not likely to redeem existing debt with a new issue at a higher rate. An accelerated sinking fund provision allows the issuer to retire a larger portion of bonds at par than required in the indenture. Passage, Inc., is most likely to exercise this option when the market value of the bonds is above par. A put option benefits the bondholder by giving him the right to sell the bond to the issuer at what is known as the ―put price,‖ at certain dates prior to maturity. The holder is most likely to exercise the put option if the market value has fallen below par value. Question ID: 13625 Which type of bond gives the bondholder the right to cash before maturity at a specified price after a specific date? A. Callable. B. Coupo