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4 Written questions

3 Multiple choice questions

  1. the price a firm has to pay to recall a bond; generally equal to the principal amount plus some interest
  2. a bond that sells above its par value. this occurs whenever the going rate of interest falls below the coupon rate
  3. the percentage change in the market price of a bond over some period of time

3 True/False questions

  1. yield to call (YTC)the average rate of return earned on a bond if it is held until the first call date


  2. interest rate price riskthe risk of changes in bond prices to which investors are exposed due to challenging interest rates


  3. yield to maturity (YTM)the average rate of return earned on bond of it held to maturity