1. Mr. Harris is a buy-and-hold investor who mainly deals in fixed income
securities. What will be the most likely impact on the returns of his fixed
income portfolio, if the market interest rates are lower in future?
Returns will not change.
Returns will be higher.
Returns will be lower.
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2. Which of the following is least likely to be an assumption for the concept
that the yield to maturity at the time of purchase measures the investor’s
rate of return?
The investor holds the bond to maturity.
The investor does not default.
The investor reinvests the coupon interest payments at varying interest
3. If a bond, bought at a discount, is held to maturity; which of the following is
least likely to be incorporated for the total return calculation?
Capital gains earned.
Coupon payments reinvested.
4. A & B are two identical bonds except for their coupon rates. The bond that
will have the lowest interest rate risk most likely has the:
lowest coupon rate.
highest coupon rate.
coupon rate significantly different from YTM.
5. An investor purchased 9% annual pay bond with maturity of 3 years and
face value of $1,000 at the current market price of $1,025.78. The
investor plans to hold the bond till maturity. What is the expected
annualized holding period return? What is the future value of reinvested
UGC NET PAPER 1
UGC NET Management
UGC NET COMPUTER SCIENCE
UGC NET COMMERCE
GATE COMPUTER SCIENCE
CFA Level 1
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