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FIN3400 Exam 2 Review Flashcards _ (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED.pdf
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FIN3400 Exam 2 Review Flashcards _ (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED.pdf
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8/5/24, 8:35 AMFIN3400 Exam 2 Review
Jeremiah
Terms in this set (28)
True of False True
A fairly priced bond with a coupon less than
the expected return must sell at a discount
from par
True or False False
Suppose two bonds of equivalent risk and
maturity have different prices such that one
is a premium and one is a discount bond. The
premium bond must have a greater return
than the discount bond.
True or False True
Any security that returns a greater
percentage of the price sooner is less price-
volatile.
True or False True
The higher a bond's coupon, the lower the
bond's price volatility.
Higher interest rates lead to lower bond True
convexity, ceteris paribus
Which of the following bond terms are II. Maturity only
generally positively related to bond price
volatility?
I. Coupon rate
II. Maturity
III. YTM
IV. Payment frequency
True or False False
For a given interest rate change, a 20-year
bond's price change will be twice that of a
FIN3400 Exam 2 Review
10-year bond's price change
1/4
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