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Collateralized Mortgage obligations are a. Mortgage pass-through securities. b. Mortgage pass-through securities with varying maturities. c....

Collateralized Mortgage obligations are

a.

Mortgage pass-through securities.

b.

Mortgage pass-through securities with varying maturities.

c.

Mortgage pass-through securities with no default risk.

d.

Mortgage pass-through securities with variable coupon rates.

e.

None of the above.

Suppose you have a 10%, 20 year bond traded at $1,120. If it is callable in 5 years at $1,150, what is the bond's approximate yield to call? Interest is paid quarterly.

a.

7.78%

b.

8.00%

c.

9.40%

d.

9.36%

Consider a bond with a duration of 7.2 years having a yield to maturity of 8% and interest rates are expected to rise by 50 basis points. What is the percentage change in the price of the bond?

a.

2.88%

b.

3.45%

c.

-3.89%

d.

-3.45%

e.

-2.88%

What's the future value of $2,200 after 5 years if the appropriate interest rate is 6%, compounded monthly?

a.

$1,537.69

b.

$2967.47

c.

$1,699.55

d.

$1,784.53

e.

$1,873.76
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Answer #1

Collateralized Mortgage obligations are

a)

Mortgage pass-through securities with varying maturities.
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