Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?

Related Mcqs:

1. Interest rates, tax rates and market risk premium are factors which an/a_____________?

   A. Industry cannot control
   B. Industry cannot control
   C. Firm must control
   D. Firm cannot control

2. 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

3. Sum of market risk and diversifiable risk are classified as total risk which is equivalent to_______________?

   A. Sharpe’s alpha
   B. Standard alpha’s
   C. Alpha’s variance
   D. Variance

4. Cost of common stock is 16% and bond yield is 9% then bond risk premium would be_________?

   A. 7%
   B. 8%
   C. 1.78%
   D. 25%

5. The call premium of bond is $760 and the call price of bond is $560 then face value of the bond is ________?

   A. 200
   B. 300
   C. 1320
   D. 0.0138

6. The value of conversion option to bond holder is $550 and the rate of return on non-convertible bond is $270 then rate of return on convertible bond is _________?

   A. 0.0204
   B. 2.04
   C. 280
   D. 820

7. The value of conversion option to bond holder is $220 and the rate of return on non-convertible bond is $350 then rate of return on convertible bond is _____________?

   A. 570
   B. 130
   C. 670
   D. 1.59

8. The call premium of bond is $560 and the call price of bond is $340 then face value of the bond is _________?

   A. $1.65
   B. $220
   C. $900
   D. $0.0165

9. The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is ____________?

   A. 0.0137
   B. 1280
   C. 1.37
   D. 200

10. The call premium of bond is $630 and the call price of bond is $240 then face value of the bond is _____________?

    A. 0.0263
    B. 870
    C. 390
    D. 2.63