Time to Maturity A bond issued by a corporation on May 1, 1999 is scheduled to m
ID: 2652518 • Letter: T
Question
Time to Maturity A bond issued by a corporation on May 1, 1999 is scheduled to mature on May 1, 2038. If today is May 2, 2009, what is this bond's time to maturity?
9 years
39 years
38 years
29 years
Bond Quotes Consider the following three bond quotes; a Treasury note quoted at 103:18, and a corporate bond quoted at 98.25, and a municipal bond quoted at 103.65. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? (Round your answers to 2 decimal places.)
rev: 03_05_2012
$1,000, $1,000, $5,000, respectively
$1,003.90, $982.50, $5,018.25 respectively
$1,035.63, $982.50, $5,182.50, respectively
$1,003.90, $1,000, $1,000, respectively
Zero Coupon Bond Price Calculate the price of a zero coupon bond that matures in 7 years if the market interest rate is 5.50 percent. (Round your answer to 2 decimal places.)
$1,000.00
$687.44
$683.99
$945.00
Investment Return MedTech Corp stock was $51.35 per share at the end of last year. Since then, it paid a $0.85 per share dividend. The stock price is currently $62.90. If you owned 200 shares of MedTech, what was your percent return?
24.15%
13.51%
19.71%
16.55%
Portfolio Weights An investor owns $11,000 of Adobe Systems stock, $16,000 of Dow Chemical, and $26,000 of Office Depot. What are the portfolio weights of each stock?
Adobe System = 0.30, Dow Chemical = 0.21, Office Depot = 0.49
Adobe System = 0.33, Dow Chemical = 0.33, Office Depot = 0.33
Adobe System = 0.27, Dow Chemical = 0.33, Office Depot = 0.40
Adobe System = 0.21, Dow Chemical = 0.30, Office Depot = 0.49
Portfolio Return Year-to-date, Company O had earned a -2.40 percent return. During the same time period, Company V earned 8.3 percent and Company M earned 6.55 percent. If you have a portfolio made up of 10 percent Company O, 20 percent Company V, and 70 percent Company M, what is your portfolio return?
rev: 10_30_2012
12.45%
17.25%
6.005%
6.485%
Average Return The past five monthly returns for K and Company are 4.75 percent, 4.92 percent, -.45 percent, -.45 percent, and 9.50 percent. What is the average monthly return?
4.014%
1.673%
3.654%
1.523%
Explanation / Answer
Time to Maturity A bond issued by a corporation on May 1, 1999 is scheduled to mature on May 1, 2038. If today is May 2, 2009, what is this bond's time to maturity?
9 years
39 years
38 years
29 years
May 1, 2038 - May 2, 2009 = 29 years
Bond Quotes Consider the following three bond quotes; a Treasury note quoted at 103:18, and a corporate bond quoted at 98.25, and a municipal bond quoted at 103.65. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? (Round your answers to 2 decimal places.)
rev: 03_05_2012
$1,000, $1,000, $5,000, respectively
$1,003.90, $982.50, $5,018.25 respectively
$1,035.63, $982.50, $5,182.50, respectively
$1,003.90, $1,000, $1,000, respectively
Treasury note at 103:18 = (103+18/32)% × $1,000 = $1,035.63
Corporate bond at 98.25 = 98.25% × $1,000 = $982.50
Municipal bond at 103.65 = 103.65× $5,000 = $5,182.50
Zero Coupon Bond Price Calculate the price of a zero coupon bond that matures in 7 years if the market interest rate is 5.50 percent. (Round your answer to 2 decimal places.)
$1,000.00
$687.44
$683.99
$945.00
$1000 / (1 = 0.055/2)^14 = $1000 / 1.461994125 = $683.99
Investment Return MedTech Corp stock was $51.35 per share at the end of last year. Since then, it paid a $0.85 per share dividend. The stock price is currently $62.90. If you owned 200 shares of MedTech, what was your percent return?
24.15%
13.51%
19.71%
16.55%
[0.85 - (51.35-62.90)] / 51.35 * 100 = 24.15%
Portfolio Weights An investor owns $11,000 of Adobe Systems stock, $16,000 of Dow Chemical, and $26,000 of Office Depot. What are the portfolio weights of each stock?
Adobe System = 0.30, Dow Chemical = 0.21, Office Depot = 0.49
Adobe System = 0.33, Dow Chemical = 0.33, Office Depot = 0.33
Adobe System = 0.27, Dow Chemical = 0.33, Office Depot = 0.40
Adobe System = 0.21, Dow Chemical = 0.30, Office Depot = 0.49
11000 + 16000 + 26000 = 53000
Adobe Systems = 11000 / 53000 = 0.21
Dow Chemical = 16000 / 53000 = 0.30
Office Depot = 26000 / 53000 = 0.49
Portfolio Return Year-to-date, Company O had earned a -2.40 percent return. During the same time period, Company V earned 8.3 percent and Company M earned 6.55 percent. If you have a portfolio made up of 10 percent Company O, 20 percent Company V, and 70 percent Company M, what is your portfolio return?
12.45%
17.25%
6.005%
6.485%
The return for a portfolio of securities is the weighted average of the individual returns.
In this case, 0.1 *-2.4% (company x weight and return) + 0.2 * 8.3% (company Y weight & return) + 0.7 *6.55% (company Z weight & return)
ie 0.1(-2.4%) + 0.2 (8.3%) + 0.7 (6.55%)
.0024 + 0.0166 + 0.004585 = 6.005%
Average Return The past five monthly returns for K and Company are 4.75 percent, 4.92 percent, -.45 percent, -.45 percent, and 9.50 percent. What is the average monthly return?
4.014%
1.673%
3.654%
1.523%
(4.75 + 4.92 - 0.45 - 0.45 + 9.50)/5 = 3.654%
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