MCQ's

  1. The stated interest payment, in dollars, made on a bond each period is called the bond's: 

A) Coupon. 

B) Face value. 

C) Maturity. 

D) Yield to maturity. 

E) Coupon rate. 

2. The principal amount of a bond that is repaid at the end of the loan term is called the bond's: 

A) Coupon. 

B) Face value. 

C) Maturity. 

D) Yield to maturity. 

E) Coupon rate. 

3. The rate of return required by investors in the market for owning a bond is called the: 

A) Coupon. 

B) Face value. 

C) Maturity. 

D) Yield to maturity. 

E) Coupon rate. 

4. The annual coupon of a bond divided by its face value is called the bond's: 

A) Coupon. 

B) Face value. 

C) Maturity. 

D) Yield to maturity. 

E) Coupon rate. 

5. A bond with a face value of $1,000 that sells for less than $1,000 in the market is called a: 

A) Par bond. 

B) Discount bond. 

C) Premium bond. 

D) Zero coupon bond. 

E) Floating rate bond.