A 5 1000 par value bond sells at 900 and matures in 10


-A bond is selling at a premium. This indicates that:

A. The yield to maturity is greater than the nominal yield

B. The market price is less than the par value

C. Interest rates have decreased since the bond was issued

D. The nominal yield is less than the current yield

-A 5% $1,000 par value bond sells at $900 and matures in 10 years. What is the amount of each interest payment?

A. $25

B. $45

C. $50

D. $90

- Which of the following CMOs has the MOST prepayment risk?

A.Sequential pay tranches

B. Accrual or Z tranches

C. Planned amortization class (PAC) tranches

D. Support or companion tranches

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Financial Management: A 5 1000 par value bond sells at 900 and matures in 10
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