Practice Quiz

FRM Financial Risk Manager Practice Test - Question List

Select how would you like to study

Study Mode Free Daily Question Test Mode
51. Tom is thinking to buy bonds. However, he is debating between long-term bonds and short-term bonds. What factors will influence his decision?
  1. His available funds.
  2. His risk preferences.
  3. The relative yields between short-term and long-term bonds.
  4. His personal patience level.
See answer
52. A bond's yield to maturity (YTM) rate is the rate of return you receive if you hold a bond until it matures and reinvest all the interest payments at the YTM rate. What factors determine the YTM of a bond?
  1. A bond’s term to maturity.
  2. Uncertainty in price.
  3. Risk.
  4. All of the above.
See answer
53. Coupons are fixed periodic interest payments. They are paid from the bond’s issue date to the bond’s maturity date. What is the relationship between a bond’s yield and its coupons?
  1. A bond’s yield is the sum of total coupons.
  2. A bond’s yield is the sum of total coupons divided by the bond’s face value.
  3. A bond’s yield is the final coupon paid on the maturity date of the bond.
  4. A bond’s yield is another name for a coupon.
See answer
54. If Tom sells a bond before it matures, he will most likely catch the bond between coupon payment dates. Then what will he get?
  1. He will only get the principal value of the bond.
  2. He will only get the face value of the bond.
  3. He will get the price of the bond plus the accrued interest that the bond has earned up to the sale date.
  4. He will get the price of the bond pus the accrued interest that the bond earns until its maturity date.
See answer
55. Tom is thinking of buying zero-coupon bonds. What are these bonds?
  1. They are bonds that don't make regular interest payments.
  2. They are bonds that mature within a year.
  3. They are bonds whose accrued interests add up to more than 0.
  4. They are bonds that have a special number zero to distinguish them from normal bonds.
See answer

Select how would you like to study

Study Mode Free Daily Question Test Mode