$\begin{array}{|l|r|r|r|r|r|rr|r} \hline & & & & & & {\quad\quad\text { Lifetime }} && \text { Open } \\ \hline & \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \\ \hline \text { Dee } & 107.97 & 108.97 & 107.88 & 108.72 & 0.72 & 121.56 & 102.44 & 432,512 \\ \hline \text { Mar } & 106.91 & 107.50 & 106.47 & 107.31 & 0.81 & 116.72 & 101.16 & 19,531 \\ \hline \end{array}$ -Suppose you purchased 8 December Treasury bond futures contracts at the low for this day. What is the value of your investment?

A) $800,000 B) $851,750 C) $863,000 D) $871,750 E) $834,000 A) $800,000 B) $851,750 C) $863,000 D) $871,750 E) $834,000

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. $\begin{array}{|l|r|l|r|r|r|r|r|} \hline \text { Issuer } & \text { Coupon } & \begin{array}{l} \text { Maturity } \\ \text { Date } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Price } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Price } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Yield } \\ \text { Change } \end{array} \\ \hline \text { Pipa Co. } & 7.500 & 2012-\text { Aug-24 } & 120.92 & 121.02 & 5.41 & 5.37 & +0.011 \\ \hline \text { Harolds Inc. } & 8.000 & 2025 \text {-Jan-10 } & 84.33 & 84.63 & 5.02 & 4.88 & +0.003 \\ \hline \text { Willie Ltd. } & 6.250 & 2018-O c t-1 & 89.47 & 89.89 & 5.19 & 4.97 & -0.016 \\ \hline \text { Kat Enterprise } & 8.250 & 2013-M a r-13 & 109.09 & 109.49 & 5.34 & 5.28 & -0.009 \\ \hline \end{array}$ -What is the current yield for the Kat bond? Note: closing price here is the mid-point between final bid and ask quotation.

A) 7.5% B) 6.7% C) 7.9% D) 3.8% E) 8.3% A) 7.5% B) 6.7% C) 7.9% D) 3.8% E) 8.3%

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. $\begin{array}{|l|r|l|r|r|r|r|r|} \hline \text { Issuer } & \text { Coupon } & \begin{array}{l} \text { Maturity } \\ \text { Date } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Price } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Price } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Yield } \\ \text { Change } \end{array} \\ \hline \text { Pipa Co. } & 7.500 & 2012-\text { Aug-24 } & 120.92 & 121.02 & 5.41 & 5.37 & +0.011 \\ \hline \text { Harolds Inc. } & 8.000 & 2025 \text {-Jan-10 } & 84.33 & 84.63 & 5.02 & 4.88 & +0.003 \\ \hline \text { Willie Ltd. } & 6.250 & 2018-O c t-1 & 89.47 & 89.89 & 5.19 & 4.97 & -0.016 \\ \hline \text { Kat Enterprise } & 8.250 & 2013-M a r-13 & 109.09 & 109.49 & 5.34 & 5.28 & -0.009 \\ \hline \end{array}$ -What is the closing price of the Pipa Company bond using the average of the final bid and ask?

A) $584 B) $725 C) $1,125 D) $1,210 E) $1,183 A) $584 B) $725 C) $1,125 D) $1,210 E) $1,183

$\begin{array}{|l|r|r|r|r|r|rr|r} \hline & & & & & & {\quad\quad\text { Lifetime }} && \text { Open } \\ \hline & \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \\ \hline \text { Dee } & 107.97 & 108.97 & 107.88 & 108.72 & 0.72 & 121.56 & 102.44 & 432,512 \\ \hline \text { Mar } & 106.91 & 107.50 & 106.47 & 107.31 & 0.81 & 116.72 & 101.16 & 19,531 \\ \hline \end{array}$ -Suppose you purchased 5 of the December Treasury bond futures contracts at the lifetime low and sold them at the close on this day. What was your profit on this transaction?

A) $38,746.00 B) $29,187.50 C) $33,485.75 D) $31,400.00 E) $34,894.50 A) $38,746.00 B) $29,187.50 C) $33,485.75 D) $31,400.00 E) $34,894.50

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. $\begin{array}{|l|r|l|r|r|r|r|r|} \hline \text { Issuer } & \text { Coupon } & \begin{array}{l} \text { Maturity } \\ \text { Date } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Price } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Price } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Yield } \\ \text { Change } \end{array} \\ \hline \text { Pipa Co. } & 7.500 & 2012-\text { Aug-24 } & 120.92 & 121.02 & 5.41 & 5.37 & +0.011 \\ \hline \text { Harolds Inc. } & 8.000 & 2025 \text {-Jan-10 } & 84.33 & 84.63 & 5.02 & 4.88 & +0.003 \\ \hline \text { Willie Ltd. } & 6.250 & 2018-O c t-1 & 89.47 & 89.89 & 5.19 & 4.97 & -0.016 \\ \hline \text { Kat Enterprise } & 8.250 & 2013-M a r-13 & 109.09 & 109.49 & 5.34 & 5.28 & -0.009 \\ \hline \end{array}$ -Suppose you own 8 of the Willie bonds. If the net change in price is 1.24%, what will be the change in the value of your investment for the next day?

A) $99.20 B) $88.96 C) $73.14 D) $56.00 E) $8.19 A) $99.20 B) $88.96 C) $73.14 D) $56.00 E) $8.19

A) has voting rights. B) often has a cumulative dividend. C) always has a fixed dividend. D) is considered a debt obligation. E) dividends are paid at the discretion of the board of directors. A) has voting rights. B) often has a cumulative dividend. C) always has a fixed dividend. D) is considered a debt obligation. E) dividends are paid at the discretion of the board of directors.

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. $\begin{array}{|l|r|l|r|r|r|r|r|} \hline \text { Issuer } & \text { Coupon } & \begin{array}{l} \text { Maturity } \\ \text { Date } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Price } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Price } \end{array} & \begin{array}{r} \text { Bid } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Ask } \\ \text { Yield } \end{array} & \begin{array}{r} \text { Yield } \\ \text { Change } \end{array} \\ \hline \text { Pipa Co. } & 7.500 & 2012-\text { Aug-24 } & 120.92 & 121.02 & 5.41 & 5.37 & +0.011 \\ \hline \text { Harolds Inc. } & 8.000 & 2025 \text {-Jan-10 } & 84.33 & 84.63 & 5.02 & 4.88 & +0.003 \\ \hline \text { Willie Ltd. } & 6.250 & 2018-O c t-1 & 89.47 & 89.89 & 5.19 & 4.97 & -0.016 \\ \hline \text { Kat Enterprise } & 8.250 & 2013-M a r-13 & 109.09 & 109.49 & 5.34 & 5.28 & -0.009 \\ \hline \end{array}$ -You own 9 Pipa bonds. How much would you receive on the next coupon payment date?

A) $762.77 B) $337.50 C) $438.61 D) $381.38 E) $675.00 A) $762.77 B) $337.50 C) $438.61 D) $381.38 E) $675.00

Exam 4: Overview of Security Types

Lifetime Open Open High Low Settle Chg High Low Int Dee 107.97 108.97 107.88 108.72 0.72 121.56 102.44 432,512 Mar 106.91 107.50 106.47 107.31 0.81 116.72 101.16 19,531 -Suppose you purchased 8 December Treasury bond futures contracts at the low for this day. What is the value of your investment?

(Multiple Choice)

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Question 81

Which of the following are money market instruments? I. Treasury bill II. Treasury bond issued for two years III. Bank certificate of deposit issued for 9 months IV. Provincial bond issued for 6 months

(Multiple Choice)

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Question 82

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. Issuer Coupon Maturity Date Bid Price Ask Price Bid Yield Ask Yield Yield Change Pipa Co. 7.500 2012- Aug-24 120.92 121.02 5.41 5.37 +0.011 Harolds Inc. 8.000 2025 -Jan-10 84.33 84.63 5.02 4.88 +0.003 Willie Ltd. 6.250 2018-Oct-1 89.47 89.89 5.19 4.97 -0.016 Kat Enterprise 8.250 2013-Mar-13 109.09 109.49 5.34 5.28 -0.009 -What is the current yield for the Kat bond? Note: closing price here is the mid-point between final bid and ask quotation.

(Multiple Choice)

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Question 83

You want the right, not the obligation, to buy 600 shares of a stock at a price of $34.50 a share. The 34.50 call option has a quoted price of $0.20 and the $34.50 put option is quoted at $1.50. How much will it cost you to acquire the right you want?

(Multiple Choice)

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Question 84

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. Issuer Coupon Maturity Date Bid Price Ask Price Bid Yield Ask Yield Yield Change Pipa Co. 7.500 2012- Aug-24 120.92 121.02 5.41 5.37 +0.011 Harolds Inc. 8.000 2025 -Jan-10 84.33 84.63 5.02 4.88 +0.003 Willie Ltd. 6.250 2018-Oct-1 89.47 89.89 5.19 4.97 -0.016 Kat Enterprise 8.250 2013-Mar-13 109.09 109.49 5.34 5.28 -0.009 -What is the closing price of the Pipa Company bond using the average of the final bid and ask?

(Multiple Choice)

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Question 85

Lifetime Open Open High Low Settle Chg High Low Int Dee 107.97 108.97 107.88 108.72 0.72 121.56 102.44 432,512 Mar 106.91 107.50 106.47 107.31 0.81 116.72 101.16 19,531 -Suppose you purchased 5 of the December Treasury bond futures contracts at the lifetime low and sold them at the close on this day. What was your profit on this transaction?

(Multiple Choice)

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Question 86

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. Issuer Coupon Maturity Date Bid Price Ask Price Bid Yield Ask Yield Yield Change Pipa Co. 7.500 2012- Aug-24 120.92 121.02 5.41 5.37 +0.011 Harolds Inc. 8.000 2025 -Jan-10 84.33 84.63 5.02 4.88 +0.003 Willie Ltd. 6.250 2018-Oct-1 89.47 89.89 5.19 4.97 -0.016 Kat Enterprise 8.250 2013-Mar-13 109.09 109.49 5.34 5.28 -0.009 -Suppose you own 8 of the Willie bonds. If the net change in price is 1.24%, what will be the change in the value of your investment for the next day?

(Multiple Choice)

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Question 87

A spread of ____ basis points is equal to 0.75 percent.

(Multiple Choice)

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Question 88

Why do corporate bonds have a higher estimated rate of return than the Treasury bonds?

(Essay)

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Question 89

At the time a futures contract is written,

(Multiple Choice)

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Question 90

A primary asset is defined as

(Multiple Choice)

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Question 91

Money market instruments are:

(Multiple Choice)

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Question 92

A bond that can be exchanged for a fixed number of shares of the issuing firm's stock at the bondholder's discretion is a(n) ________ bond.

(Multiple Choice)

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Question 93

Gold (CMX) 100 troy oz.; $ per troy oz. Open High Low Settle \Chg Sea. Hi Sea. Lo Op. Int. December 384.00 389.50 382.20 384.60 0.20 394.80 280.00 183.612 April 385.00 391.00 385.00 387.10 0.15 395.70 287.00 10,167 -Suppose you sold 8 April gold futures at the high price for the day and closed the position by purchasing 8 contracts one month later at a quoted price of 396.45. What is your dollar profit on this transaction?

(Multiple Choice)

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Question 94

Preferred stock:

(Multiple Choice)

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Question 95

A ______ futures contract is a futures contract on an intangible asset such as a stock index.

(Multiple Choice)

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Question 96

Which of the following is not a characteristic of a money market security? Money market securities:

(Multiple Choice)

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Question 97

You purchased 3 call option contracts with a strike price of $35 and a premium of $1.20. At expiration, the stock was selling for $37.20 a share. What is your total profit or loss?

(Multiple Choice)

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Question 98

An agreement made today regarding the terms of a trade that will take place at a later date is called a(n) ___________.

(Multiple Choice)

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Question 99

Assume that a face value of $1,000 for each type of bond. Yields are calculated to full maturity with semi-annual compounding. Yield change is the change in ask yield from the previous close. Issuer Coupon Maturity Date Bid Price Ask Price Bid Yield Ask Yield Yield Change Pipa Co. 7.500 2012- Aug-24 120.92 121.02 5.41 5.37 +0.011 Harolds Inc. 8.000 2025 -Jan-10 84.33 84.63 5.02 4.88 +0.003 Willie Ltd. 6.250 2018-Oct-1 89.47 89.89 5.19 4.97 -0.016 Kat Enterprise 8.250 2013-Mar-13 109.09 109.49 5.34 5.28 -0.009 -You own 9 Pipa bonds. How much would you receive on the next coupon payment date?

(Multiple Choice)

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Question 100

Lifetime Open Open High Low Settle Chg High Low Int Dee 107.97 108.97 107.88 108.72 0.72 121.56 102.44 432,512 Mar 106.91 107.50 106.47 107.31 0.81 116.72 101.16 19,531 -Suppose you purchased 8 December Treasury bond futures contracts at the low for this day. What is the value of your investment?

Which of the following are money market instruments? I. Treasury bill II. Treasury bond issued for two years III. Bank certificate of deposit issued for 9 months IV. Provincial bond issued for 6 months

You want the right, not the obligation, to buy 600 shares of a stock at a price of $34.50 a share. The 34.50 call option has a quoted price of $0.20 and the $34.50 put option is quoted at $1.50. How much will it cost you to acquire the right you want?

A spread of ____ basis points is equal to 0.75 percent.

Why do corporate bonds have a higher estimated rate of return than the Treasury bonds?

At the time a futures contract is written,

A primary asset is defined as

Money market instruments are:

A bond that can be exchanged for a fixed number of shares of the issuing firm's stock at the bondholder's discretion is a(n) ________ bond.

Preferred stock:

A ______ futures contract is a futures contract on an intangible asset such as a stock index.

Which of the following is not a characteristic of a money market security? Money market securities:

You purchased 3 call option contracts with a strike price of $35 and a premium of $1.20. At expiration, the stock was selling for $37.20 a share. What is your total profit or loss?

An agreement made today regarding the terms of a trade that will take place at a later date is called a(n) ___________.

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Mutual Funds

The Stock Market

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

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