Practice Bonds Questions and Answers

• What is the tenor of Sovereign Gold Bonds (SGBs) issued by the Government of India?
• A company issues ₹10 crore worth of bonds at a coupon rate of 8% annually, while the market interest rate is 10%. The bonds are sold at a discount. What ...
• A bond with a face value of ₹1,000, 5% annual coupon, and maturity of 5 years is sold at ₹950. What does this price suggest?
• A debenture with ₹1,000 face value offers 10% annual coupon, paid semi-annually. What will be the effective annual yield?
• A company issues a 10-year callable bond with a 9% coupon. After 5 years, market interest rates fall to 6%. What is the most likely action the issuer will ...
• An investor purchased a bond for ₹1,200 that pays an annual interest of ₹100 and matures in 5 years at face value of ₹1,000. What does this suggest a...
• An insurance company invests in a ₹1,000 face value bond carrying a 7% annual coupon, maturing in 10 years. Market interest rates fall to 5% soon after p...
• BankCo holds debt securities: • Portfolio A: Government bonds held to collect contractual interest/principal. • Portfolio B: Corporate bonds held to co...
• BankCo holds debt securities: • Portfolio A: Government bonds held to collect contractual interest/principal. • Portfolio B: Corporate bonds held to co...
• A bond with face value ₹1,000 pays annual coupon 9%. Market yield for similar risk is 12%. Approximate bond price (one-year discounting for perpetuity ig...
• Which of these explain effective interest method for amortisation of premium/discount on bonds?
• A financial instrument was issued at a discount. Principal ₹10,00,000, issue proceeds ₹9,40,000, life 5 years. Using effective interest method, if effe...
• A bond selling at a price above its face value is said to be selling at a:
• Which type of bond allows the holder to convert it into a specified number of equity shares?
• A zero-coupon bond with a face value of ₹1,000 matures in 5 years. If the market yield is 8%, what is its present value? (PV factor for 5 years @ 8% is 0...
• A bond selling at a price higher than its face value is said to be selling at:
• The risk that a bond issuer will fail to make the promised interest or principal payments is known as:
• A bond with a face value of ₹1,000 pays an annual coupon of 8% and matures in 5 years. If the current market yield for similar bonds is 10%, the bond is ...
• The duration of a bond is a measure of its: