Bonds
901. A sum of Rs. 100/- perpetual bond is currently selling for RS. 95/-. The coupon rate of interest is 13.5%. The approximate discount rate is 15%. The value of the bond and the YTM is:
(a) Rs. 90/- and 14.2% Value is (13.5*15%=90) and YTM is ((13.5/95)*100=14.21%)
(b) Rs. 100/- and 13.5%
(c) Rs. 90 and 15%
(d) Rs. 90/- and 13.5%
902. In 2001, Meridian Ltd. has issued bonds of Rs. 10,000/-each due in 2011 with a 14% per annum coupon rate payable at the end of each year during the life of the bond. If the required rate of interest is 8%, find the present value of the bond. Tick the nearest option.
(a) 10,000
(b) 7302
(c) 2,700
(d) 14,026 (9394.11+4631.93=14026.05)
903. The present market value of an equity share is Rs. 80/-; and the exercisable price of the warrant is Rs. 60/- per share. An investor is holding a warrant entitling him to purchase 50 equity shares. The minimum value of the warrant is:
(a) 1,000/- (80-60=20*50=1000)
(b) 4,000/-
(c) 3,000/-
(d) None of these
904. A bond with a coupon rate of 8% is available at its face value of Rs. 1,000/-. The market rate of return on an instrument with similar risk goes down to 6%. The bond price will become:
(a) 1,000/-
(b) 750/-
(c) 1,333/- (800/6%)
(d) None of these
905. A bond with a coupon rate of 10% is available at Rs. 1,250/-. The face value of the bond is Rs. 1,000/-. The effective yield on the bond is:
(a) 10%
(b) 8% (100/1250*100=8%)
(c) 12%
(d) None of these
906. In 2002, XYZ has issued bonds of Rs. 1,000/- each due in 2012 with 14% p.a. coupon rate payable at the end of each year during the life of the bond. The present value of the bond is ------------- if the required rate of return is 14%.
(a) 1,000/-
(b) 9,500/-
(c) 2,750/-
(d) 15,000/-
(907) A Rs. 1,000/- bond has a 6% annual coupon and is due in 2 years. The value in today’s market is Rs. 900/-. The YTM of this bond is:
(a) 9.9%
(b) 10.40%
(c) 11.90%
(d) 11%
(e) None
(908) If
(a) Rs. 90/- and 14.2% Value is (13.5*15%=90) and YTM is ((13.5/95)*100=14.21%)
(b) Rs. 100/- and 13.5%
(c) Rs. 90 and 15%
(d) Rs. 90/- and 13.5%
902. In 2001, Meridian Ltd. has issued bonds of Rs. 10,000/-each due in 2011 with a 14% per annum coupon rate payable at the end of each year during the life of the bond. If the required rate of interest is 8%, find the present value of the bond. Tick the nearest option.
(a) 10,000
(b) 7302
(c) 2,700
(d) 14,026 (9394.11+4631.93=14026.05)
903. The present market value of an equity share is Rs. 80/-; and the exercisable price of the warrant is Rs. 60/- per share. An investor is holding a warrant entitling him to purchase 50 equity shares. The minimum value of the warrant is:
(a) 1,000/- (80-60=20*50=1000)
(b) 4,000/-
(c) 3,000/-
(d) None of these
904. A bond with a coupon rate of 8% is available at its face value of Rs. 1,000/-. The market rate of return on an instrument with similar risk goes down to 6%. The bond price will become:
(a) 1,000/-
(b) 750/-
(c) 1,333/- (800/6%)
(d) None of these
905. A bond with a coupon rate of 10% is available at Rs. 1,250/-. The face value of the bond is Rs. 1,000/-. The effective yield on the bond is:
(a) 10%
(b) 8% (100/1250*100=8%)
(c) 12%
(d) None of these
906. In 2002, XYZ has issued bonds of Rs. 1,000/- each due in 2012 with 14% p.a. coupon rate payable at the end of each year during the life of the bond. The present value of the bond is ------------- if the required rate of return is 14%.
(a) 1,000/-
(b) 9,500/-
(c) 2,750/-
(d) 15,000/-
(907) A Rs. 1,000/- bond has a 6% annual coupon and is due in 2 years. The value in today’s market is Rs. 900/-. The YTM of this bond is:
(a) 9.9%
(b) 10.40%
(c) 11.90%
(d) 11%
(e) None
(908) If