1：A frequently used approximation for the yield to maturity on a long-term bond is the_________
2：The current yield on a coupon bond is the bonds _________ divided by its _________
答：annual coupon payment; price
3：When a bonds price falls, its yield to maturity _________ and its current yield _________
4：The yield to maturity for a one-year discount bond equals_________
答：the increase in price over the year, divided by the initial price.
5：If a $10,000 face value discount bond maturing in one year is selling for $8,000, then its yield to maturity is_________
6：If a $10,000 face value discount bond maturing in one year is selling for $9,000, then its yield to maturity is_________
7：If a $10,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is_________
8：If a $5,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is_________
9：The Fisher equation states that_________
答：both A and B of the above are true.
10：If you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is_________
11：If you expect the inflation rate to be 5 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is_________
12：The nominal interest rate minus the expected rate of inflation_________
答：defines the real interest rate.
13：In which of the following situations would you pfer to be making a loan?
答：The interest rate is 4 percent and the expected inflation rate is 1 percent.
14：In which of the following situations would you pfer to be borrowing?
答：The interest rate is 25 percent and the expected inflation rate is 50 percent.
15：What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,200 one year later?
16：What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 one year later?
17：The return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,100 one year later is_________
18：The return on a 10 percent coupon bond that initially sells for $1,000 and sells for $900 one year later is_________
19：Which of the following are true concerning the distinction between interest rates and return?
答：Only A and B of the above are true.
20：If the interest rates on all bonds rise from 5 to 6 percent over the course of the year, which bond would you pfer to have been holding?
答：A bond with one year to maturity
21：Suppose you are holding a 5 percent coupon bond maturing in one year with a yield to maturity of 15 percent. If the interest rate on one-year bonds rises from 15 percent to 20 percent over the course of the year, what is the yearly return on the bond you are holding?
22：(I) Prices of longer-maturity bonds respond more dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for short-term bonds.
答：(I) is true, (II) false.
23：(I) Prices of longer-maturity bonds respond less dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for shorter-term bonds.
答：Both are false.
24：The riskiness of an assets return that results from interest rate changes is called_________
25：If an investors holding period is longer than the term to maturity of a bond, he or she is exposed to_________
26：Reinvestment risk is the risk that_________
答：a bonds future coupon payments may have to be invested at a rate lower than the bonds yield to maturity.
27：(I) The average lifetime of a debt securitys stream of payments is called duration. (II) The duration of a portfolio is the weighted average of the durations of the individual securities, with the weights reflecting the proportion of the portfolio invested in each.
答：Both are true.
28：The duration of a ten-year, 10 percent coupon bond when the interest rate is 10 percent is 6.76 years. What happens to the price of the bond if the interest rate falls to 8 percent?
答：it rises 12.3 percent
29：When the lender provides the borrower with an amount of funds that must be repaid to the lender at the maturity date, along with an additional payment for the interest, it is called a ______
30：A discount bond_________
答：is also called a zero-coupon bond.
31：The interest rate that is adjusted for actual changes in the price level is called the_________
答：ex post real interest rate.
32：The change in the bonds price relative to the initial purchase price is_________
答：rate of capital gain.
33：The return on a bond is equal to the yield to maturity when_________
答：the holding period and the maturity of the bond are identical.
34：Bonds whose term to maturity is shorter than the holding period are also subject to_________
35：A _____ is a type of loan that has the same cash flow payment every year throughout the life of the loan.
36：A bonds current market value is equal to the psent value of the coupon payments plus the psent value of the face amount.
37：Discounting the future is the procedure used to find the future value of a dollar received today.
38：The current yield is the best measure of an investors return from holding a bond.
39：Unless a bond defaults, an investor cannot lose money investing in bonds.
40：The current yield is the yearly coupon payment divided by the current market price.
41：Prices for long-term bonds are more volatile than for shorter-term bonds.
42：A long-term bonds price is less affected by interest rate movements than is a short-term bonds price.
43：Increasing duration implies that interest-rate risk has increased.
44：All else being equal, the greater the interest rate the greater is the duration.
45：Interest-rate risk is the uncertainty that an investor faces because the interest rate at which a bonds future coupon payments can be invested is unknown.
46：The real interest rate is equal to the nominal rate minus inflation.
47：The current yield goes up as the price of a bond falls.
48：Changes in interest rates make investments in long-term bonds risky.
49：Bonds with a maturity that is longer than the holding period have no interest-rate risk.