An average inflation rate which is expected over life of security is classified as:
A. Inflation premium
B. Off season premium
C. Nominal premium
D. Required premium
An inflation rate includes in bond’s interest rates is one which is inflation rate:
A. At bond issuance
B. Expected in future
C. Expected at time of maturity
D. Expected at deferred call
A market interest rate for specific type of bond is classified as bond’s:
A. Required rate of return
B. Required option
C. Required rate of redemption
D. Required rate of earning
An outstanding bond are also classified as:
A. Standing bonds
B. Outdated bonds
C. Dated bonds
D. Seasoned bonds
Coupon rate of convertible bond is:
A. Higher
B. Lower
C. Variable
D. Stable
An annual interest payment divided by current price of bond is considered as:
A. Current yield
B. Maturity yield
C. Return yield
D. Earning yield
Payment divided by par value is classified as:
A. Divisible payment
B. Coupon payment
C. Par payment
D. Per period payment
Treasury bonds are exposed to additional risks that are included:
A. Reinvestment risk
B. Interest rate risk
C. Investment risk
D. Both A and B
Bonds that have high liquidity premium are usually have:
A. Inflated trading
B. Default free trading
C. Less frequently traded
D. Frequently traded
Falling interest rate leads change to bondholder income which is:
A. Reduction in income
B. Increment in income
C. Matured income
D. Frequent income
