CFA一级模考题
1 . What is the yield to call on a bond that has an 8% coupon paid annually, $1,000 face value, 10
years to maturity and is first callable in 6 years? The current market price is $1,100. The call price is the face value plus 1-year’s interest. A) 7.14%. B) 6.00%. C) 7.02%. C was correct!
N = 6; PV = -1,100.00; PMT = 80; FV = 1,080; Compute I/Y = 7.02%.
2. Which of the following is least likely an example of external credit enhancement?
A) Bank guarantee. B) Excess spread. C) Surety bond. B was correct!
Excess spread is an internal credit enhancement. External credit enhancements include bank guarantees, letters of credit, and surety bonds.
3. A 5-year bond with a 10% coupon has a present yield to maturity of 8%. If interest rates remain
constant one year from now, the price of the bond will be: A) the same. B) higher. C) lower. C was correct!
A premium bond sells at more than face value, thus as time passes the bond value will converge upon the face value.
4. An investor buys a 20-year, 10% annual coupon bond for $900 and sells it at the end of five
years for $951. Calculate the rate of return and the current yield at the end of five years. Rate of return Current yield A) 9.4% 11.00% B) 12.0% 11.00% C) 12.0% 10.51% C was correct!
Realized (horizon) yield = rate of return based on reinvestment rate on selling price at the end of the holding period horizon.
PV = 900; FV = 951; n = 5; PMT = 100; compute i = 12% Current Yield = annual coupon payment / bond price CY = 100 / $951 = 0.1051 or 10.51%
5 . A yield curve for coupon bonds is composed of yields on bonds with similar:
A) maturities. B) issuers.
C) coupon rates. B was correct!
Yield curves are typically constructed for bonds of the same or similar issuers, such as a government bond yield curve or AA rated corporate bond yield curve.
