QUESTION 8
For a downward sloping yield curve, which of the following yield will be plotted above the other yields?
Zero rate.
Yield on 6% coupon.
Annuity yield.
Par yield.
QUESTION 9
A bond is trading at a discount. The discount in bond pricing implies which of the following relationship between its coupon rate and yield?
coupon rate = yield to maturity.
coupon rate < yield to maturity.
coupon rate > yield to maturity.
Coupon effect does not specify any coupon-yield relations.
QUESTION 10
A callable bond is currently trading at a premium. If you expect the bond to be called on the first call date, how would the yield to call compare to the bond's coupon rate and yield to
maturity?
The yield to call will be higher than the bond's coupon rate and yield to maturity.
The yield to call will be higher than the bond's coupon rate, but lower than the bond's yield to maturity.
The yield to call will be lower than the bond's coupon rate, but higher than the bond's yield to maturity.
The yield to call will be lower than the bond's coupon rate and yield to maturity.