Stock Market Basics

Bonds and Interest Rates

12 of 60 questions in the app

Bond basics

  1. What do you acquire when you buy a bond? Easy
  2. What does the coupon of a bond denote? Easy
  3. How is the price of bonds usually quoted? Easy
  4. What happens with a classic bond at the end of its term? Easy

Interest rates and prices

  1. What tends to happen to the prices of outstanding bonds when the general level of interest rates rises? Easy
  2. Why does a bond's yield often differ from its coupon? Easy

Issuers

  1. Who issues German federal bonds (Bundesanleihen)? Easy
  2. Why do corporate bonds usually offer higher interest than federal bonds with the same maturity? Easy

Measuring interest rate risk

  1. What does a bond's modified duration indicate approximately? Medium
  2. Which features lead to a higher duration for otherwise identical bonds? Medium

Interest rates and prices

  1. A bond with a 3% coupon trades at 96. What is the current yield? Hard

Measuring interest rate risk

  1. A bond has a modified duration of 8. The market yield rises by 0.5 percentage points. How does the price change approximately? Hard

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