CFA一级模考题
1 . Which of the following statements about zero-coupon bonds is least accurate?
A) The lower the price, the greater the return for a given maturity.
B) A zero coupon bond may sell at a premium to par when interest rates decline. C) All interest is earned at maturity. B was correct!
Zero coupon bonds always sell below their par value, or at a discount prior to maturity. The amount of the discount may change as interest rates change, but a zero coupon bond will always be priced less than par.
2. A bond with a face value of $1,000 pays a semi-annual coupon of $60. It has 15 years to
maturity and a yield to maturity of 16% per year. What is the value of the bond? A) $774.84. B) $697.71. C) $832.88. A was correct!
FV = 1,000; PMT = 60; N = 30; I = 8; CPT → PV = 774.84
3. An analyst observes a 5-year, 10% coupon bond with semiannual payments. The face value is
£1,000. How much is each coupon payment? A) £50. B) £25. C) £100. A was correct!
The coupon rate is the percentage of par value paid annually. With semiannual coupons, half of the annual coupon rate is paid every six months. For a 5-year, 10% coupon bond with semiannual payments and a face value of £1,000, each coupon payment is half of 10% times £1,000, or £50.
4. A covenant that requires the issuer not to let the insurance coverage lapse on assets pledged as
collateral is an example of a(n): A) affirmative covenant. B) negative covenant. C) inhibiting covenant. A was correct!
Covenants are classified as negative or affirmative. Affirmative covenants specify administrative actions a bond issuer is required to take, such as maintaining insurance
coverage on assets pledged as collateral. Negative covenants are restrictions on a bond issuer’s actions, such as preventing an issuer from selling any assets that have been pledged as collateral or pledging them again as collateral for additional debt.
5. A $1,000 par value, 10%, semiannual, 20-year debenture bond is currently selling for $1,100.
What is this bond's current yield and will the current yield be higher or lower than the yield to maturity?
Current Yield Current Yield vs. YTM A) 8.9% lower B) 9.1% higher C) 8.9% higher
B was correct!
Current yield = annual coupon payment/price of the bond CY = 100/1,100 = 0.0909
The current yield will be between the coupon rate and the yield to maturity. The bond is
selling at a premium, so the YTM must be less than the coupon rate, and therefore the current yield is greater than the YTM.
The YTM is calculated as: FV = 1,000; PV = -1,100; N = 40; PMT = 50; CPT → I = 4.46 × 2 = 8.92