What is a bond?
What are the four main types of bonds?
Why are U.S. Treasury bonds not completely riskless?
In addition to default risk, what key risk do investors in foreign
bonds face?
Define floating-rate bonds, zero coupon bonds, putable bonds,
income bonds, convertible bonds, and inflation indexed bonds.
How is the rate on a floating-rate bond determined? On an indexed
bond?
What are the two ways sinking funds can be handled? Which alter-
native will be used if interest rates have risen? Which if interest rates
have fallen?
A bond that matures in eight years has a par value of $1,000, an annual
coupon payment of $70, and a market interest rate of 9 percent. What
is its price?
A bond that matures in 12 years has a par value of $1,000, an annual
coupon of 10 percent, and a market interest rate of 8 percent. What
is its price?
Which of these bonds is a “discount bond,” and which is a “premium bond”?
