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1) An inflation rate includes in bond’s interest rates is one which is inflation rate________? a. At bond issuance b. Expected in future c. Expected at time of maturity d. Expected at deferred call
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2) An average inflation rate which is expected over life of security is classified as__________? a. Inflation premium b. Off season premium c. Nominal premium d. Required premium
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3) Type of bond which pays interest payment only when it earns is classified as__________? a. Income bond b. Interest bond c. Payment bond d. Earning bond
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4) Price of an outstanding bond increases when market rate___________? a. Never changes b. Increases c. Decreases d. Earned
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5) If coupon rate is less than going rate of interest, then bond will be sold________? a. Seasoned par value b. More than its par value c. Seasoned par value d. At par value
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6) A bond whose price will rise above its face value is classified as________? a. Premium face value b. Premium bond c. Premium stock d. Premium warrants
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7) Stated value of bonds or face value is considered as_____________? a. State value b. Par value c. Bond value d. Per value
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8) Real risk-free interest rate in addition with an inflation premium is equal to_____________? a. Required interest rate b. Quoted risk-free interest rate c. Liquidity risk-free interest rate d. Premium risk-free interest rate
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9) Bonds with deferred call have protection which is classified as__________? a. Provision protection b. Provision protection c. Deferred protection d. Call protection
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10) When price of bond is calculated below its par value, it is classified as___________? a. classified bond b. Discount bond c. Compound bond d. Consideration earning
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11) Rate on debt that increases as soon market rises is classified as________? a. Rising bet rate b. Floating rate debt c. Market rate debt d. Stable debt rate
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12) Bonds that can be converted into shares of common stock are classified as_________? a. Convertible bonds b. Stock bonds c. Shared bonds d. Common bonds
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13) Reinvestment risk of bond’s is usually higher on______? a. Income bonds b. Callable bonds c. Premium bonds d. Default free bonds
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14) Market in which bonds are traded over-the-counter than in an organized exchange is classified as__________? a. Organized markets b. Trade markets c. Counter markets d. Bond markets
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15) Coupon payment of bond which is fixed at time of issuance____________? a. Remains same b. Becomes stable c. Becomes change d. Becomes low
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16) Coupon payment is calculated with help of interest rate, then this rate considers as________? a. Payment interest b. Par interest c. Coupon interest d. Yearly interest rate
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17) An effect of interest rate risk and investment risk on a bond’s yield is classified as_________? a. Reinvestment premium b. Investment risk premium c. Maturity risk premium d. Defaulter’s premium
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18) Yield of interest rate which is below than coupon rate, this yield is classified as_________? a. Yield to maturity b. Yield to call c. Yield to earning d. Yield to investors
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19) If market interest rate falls below coupon rate then bond will be sold__________? a. Below its par value b. Above its par value c. Equal to return rate d. Seasoned price
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20) Rate of return (in percentages) consists of___________? a. Capital gain yield interest yield b. Return yield + stable yield c. Return yield + unstable yield d. Par value + market value
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21) Type of bonds that are issued by foreign governments or foreign corporations are classified as__________? a. Zero risk bonds b. Zero bonds c. Foreign bonds d. Government bonds
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22) If market interest rate rises above coupon rate, then bond will be sold_____________? a. Equal to return rate b. Seasoned price c. Below its par value d. Above its par value
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23) An interest rate which is used in calculation of cash flows of bonds is called______________? a. Required rate of redemption b. Required rate of earning c. Required rate of return d. Required option
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24) Type of options that permit bond holder to buy stocks at stated price are classified as______? a. Provision b. Guarantee c. Warrants d. Convertibles
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25) Bond that has been issued in very recent timing is classified as_______? a. Mature issue b. Earning issue c. New issue d. Recent issue
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26) Bonds issued by local and state governments with default risk are____________? a. Municipal bonds b. Corporation bonds c. Default bonds d. Zero bonds
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27) Maturity date decides at time of issuance of bond and legally permissible is classified as____________? a. Original maturity b. Permanent maturity c. Artificial maturity d. Valued maturity
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28) Value generally promises to pay at maturity date and a firm borrows is considered as bond’s__________? a. Bond value b. Per value c. State value d. Par value
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29) Bonds issued by government and backed by Pak government are classified as_________? a. Issued security b. Treasury bonds c. U.S bonds d. Return security
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30) An increasing in interest rate leads to decline in value of__________? a. Junk bonds b. Outstanding bonds c. Standing bonds d. Premium bonds
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