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FIN 534 Final Exam Solutions – Perfect Score
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CH: 4,5
Question 1
Which of the following statements is CORRECT?
Question 2
Which of the following statements is CORRECT?
Question 3
Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant?
Question 4
You plan to invest some money in a bank account. Which of the following banks provides you with the highest effective rate of interest?
Question 5
Which of the following statements is CORRECT?
Question 6
Which of the following statements regarding a 15-year (180-month) $125,000, fixed-rate mortgage is CORRECT? (Ignore taxes*…show more content…*

Question 14 Which of the following bank accounts has the highest effective annual return? Question 15 0 out of 2 points Which of the following statements is CORRECT? Question 16 Which of the following statements is CORRECT? Question 17 A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is NOT CORRECT? Question 18 Which of the following statements is CORRECT? Question 19 A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? Question 20 Which of the following statements is NOT CORRECT? Question 21 A 10-year Treasury bond has an 8% coupon, and an 8-year Treasury bond has a 10% coupon. Both bonds have the same yield to maturity. If the yield to maturity of both bonds increases by the same amount, which of the following statements would be CORRECT? Question*…show more content…*

Question 23 Which of the following statements is CORRECT? Question 24 Which of the following bonds has the greatest interest rate price risk? Question 25 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? Question 26 Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as

Question 14 Which of the following bank accounts has the highest effective annual return? Question 15 0 out of 2 points Which of the following statements is CORRECT? Question 16 Which of the following statements is CORRECT? Question 17 A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is NOT CORRECT? Question 18 Which of the following statements is CORRECT? Question 19 A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? Question 20 Which of the following statements is NOT CORRECT? Question 21 A 10-year Treasury bond has an 8% coupon, and an 8-year Treasury bond has a 10% coupon. Both bonds have the same yield to maturity. If the yield to maturity of both bonds increases by the same amount, which of the following statements would be CORRECT? Question

Question 23 Which of the following statements is CORRECT? Question 24 Which of the following bonds has the greatest interest rate price risk? Question 25 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? Question 26 Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as

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