Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![3. How would you rank the bonds from the shortest to the longest duration?
Bond Number Maturity (Years) Coupon Rate Frequency Yield (Annual)
1
2
1
2
(a) 2-3-4-1
(b) 2-1-4-3
(c) 4-1-2-3
(d) 4-2-3-1
1
2
3
4
10
10
10
9
6.00%
6.00%
0.00%
0.00%
1
6.00%
6.00%
6.00%
6.00%
4. Which of the following would be considered a key difference between a forward contract and a
futures contract?
(a) One clearinghouse is the counterparty to all forward contracts.
(b) The owner of the forward contract receives cash flows from the underlying asset between
contract origination and delivery.
(c) Futures contract is marked to market regularly, while a forward contract is not.
(d) Only forward contracts can be set up as cash settlement contracts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff2ab050a-d13e-4a73-9fee-dc44d5d071e8%2F6b859125-2cd0-4566-905b-df4f5c1965d1%2Fmbpj667_processed.png&w=3840&q=75)
Transcribed Image Text:3. How would you rank the bonds from the shortest to the longest duration?
Bond Number Maturity (Years) Coupon Rate Frequency Yield (Annual)
1
2
1
2
(a) 2-3-4-1
(b) 2-1-4-3
(c) 4-1-2-3
(d) 4-2-3-1
1
2
3
4
10
10
10
9
6.00%
6.00%
0.00%
0.00%
1
6.00%
6.00%
6.00%
6.00%
4. Which of the following would be considered a key difference between a forward contract and a
futures contract?
(a) One clearinghouse is the counterparty to all forward contracts.
(b) The owner of the forward contract receives cash flows from the underlying asset between
contract origination and delivery.
(c) Futures contract is marked to market regularly, while a forward contract is not.
(d) Only forward contracts can be set up as cash settlement contracts.
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