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Canadian Securities Course (CSC) Finance — practice by topic

Browse 30 questions across 4 Finance topics. Choose what you want to revise, then open a question to check its answer and worked solution.

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Finance topics

Bond Valuation (30)Finance (30)Fixed Income (30)Investments (30)

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A bond certificate states the amount the issuer will repay at the end of the term. That stated amount is the:Read the answer and worked solution →A bond pays 6 percent on a 1,000 face value, giving 60 a year. The 6 percent figure is the:Read the answer and worked solution →An investor discounts every future payment back to today to value a bond. The rate used for that is the:Read the answer and worked solution →A bond's coupon rate is 4 percent while comparable yields are 6 percent. The bond will trade:Read the answer and worked solution →

Worked practice questions

A bond certificate states the amount the issuer will repay at the end of the term. That stated amount is the:

  1. Par value
  2. Pay ratio
  3. Price index
  4. Profit share
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Correct answer: A. Par value

1. The figure is printed on the bond itself. 2. It is what the holder gets back at maturity. 3. That amount is the par value, also called face value. _Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._

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A bond pays 6 percent on a 1,000 face value, giving 60 a year. The 6 percent figure is the:

  1. Currency rate
  2. Coupon rate
  3. Capital gain
  4. Credit score
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Correct answer: B. Coupon rate

1. The rate is applied to the face value to size the payment. 2. Six percent of 1,000 is exactly the 60 paid each year. 3. That rate is the coupon rate. _Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._

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An investor discounts every future payment back to today to value a bond. The rate used for that is the:

  1. Yield to maturity
  2. Yearly turnover
  3. Yield of dividends
  4. Year end rate
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Correct answer: A. Yield to maturity

1. Coupons and the final repayment are future cash flows. 2. One rate brings all of them into present value terms. 3. That rate is the yield to maturity. _Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._

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