Multiple choice

Question 1 

A 30-year zero-coupon bond that yields 12% percent is issued with a $1000 par value. What is the issuance price of the bond (round to the nearest dollar)?

A. $33

B. $83

C. $8,333

D. $3,888

 Question 2 

A 14-year zero-coupon bond was issued with a $1000 par value to yield 12%. What is the approximate market value of the bond?

A. $597

B. $205

C. $275

D. $482

 Question 3

Which of the following does not influence the yield to maturity for a security?

A. Required real rate of return

B. Risk free rate

C. Business risk

D. Yields of similar securities

 Question 4 

An increase in the riskiness of a particular security would NOT affect:

A. the risk premium for that security.

B. the premium for expected inflation.

C. the total required return for the security.

D. investors' willingness to buy the security