Global Financial Markets and Instruments Coursera Week 2

In this blog you will find the correct answer of the Coursera quiz Global Financial Markets and Instruments Coursera Week 2 mixsaver always try to brings best blogs and best coupon codes

Week- 2

PRACTICE QUIZ
A primer on financial assets

1. Real assets such as buildings, machines, land and knowledge are:

The means of production of goods and services of an economy.
The means by which individuals in an economy can hold the income generated by the real assets in the process of production of good and services.
None of the above.

2. TRUE OR FALSE.

Financial assets are securities in which individuals can invest their wealth with the expectation to obtain a return in the future.

FALSE.
TRUE

PRACTICE QUIZ
Basics of Bond Valuation

1. You expect the Federal Reserve will begin to loosen credit and force yields down by 50 basis points across all maturities in the very near future. (A basis point is equal to 1/100th of 1 percent so 50 basis points are equal to ½ of 1%.) How do you expect the Fed’s policy effect will show up in the bond market?

Bond prices will decrease.
Bond prices will increase.
Bond prices will remain the same.
Not enough information.

2. The price of a US government issued five year zero coupon bond, with a face value of $1000, is $744.09. What is the yield to maturity of the bond if the interest is compounded yearly? Round off your final answer to two digits after the decimal point. State your answer as a percentage rate (i.e. x.xx)

Enter answer here

6.09

3. What is the market value of a 20-year bond with face value of $1000, which makes quarterly coupon payments at a coupon rate of 10%, if the required rate of return is 8% per year, compounded quarterly? Round off your final answer to three digits after the decimal point. State your answer as ‘x.xxx’

Enter answer here

1198.723

4. Consider a bond, which pays $80 in annual coupon, and has a face value of $1,000. What is its yield to maturity if the bond has 20 years remaining until maturity and currently selling for $1,200?

8.32%
9.67%
6.22%
8.77%

5. You have just purchased a newly issued $1,000 five-year Vanguard Company bond at par. This five-year bond pays $60 in semi-annual coupon payments ($60 every six months). You are also considering the purchase of another Vanguard Company bond that pays $30 in semi-annual coupons and has six years remaining before maturity. This bond also has a face value of $1000. Both bonds make coupon payments semiannually.

What is the yield-to-maturity on the five-year bond? State your answer as a percentage rate.

Enter answer here

6. Refer to back to Question 5. What is the effective annual yield on the five-year bond? Round off your final answer to two digits after the decimal point. State your answer as a percentage rate (i.e ‘x.xx’)

Enter answer here

12.36

7. Refer back to Question 5. Assume that the five-year bond and the six-year bond have the same yield. What should you be willing to pay for the six-year bond? Round off your final answer to three digits after the decimal point. State your answer as ‘x.xxx’

Enter answer here

748.485

8. Suppose that you purchased a 15-year bond that pays semi-annual coupon of $20 and is currently selling at par. What would your realized annual return be if you sold the bond five years later when the yield is 5.5%? State your answer as a percentage rate rounded to three digits after the decimal point, i.e. ‘x.xxx’

Enter answer here

1.807

Calculating Treasury Bill Prices

1. The financial press conventionally reports Treasury bill prices as:

Discounts from $100 face value for 360-day
Discounts from $100 face value for 365-day
None of the above

2. What would be the price of a U.S Treasury bill with a face value of $ 100,000 that has 180 days left to maturity and has a discount quote of 0.358%?

99,821.00
98,851.36
99,713.66
94,456.36

3. A $100,000 face value Treasury bill with 54 days to maturity is selling for $98,999. What is the yield to maturity on this security? Round off to two-digits after the decimal point. State your answer as a percentage rate (if your answer is one point two three percent, input 1.23) Please consider the year as 360 days when calculating the yield

Enter answer here

6.74

4. Refer back to question 3. What is the effective annual yield? Round off to two digits after the decimal point. State your answer as a percentage rate (if your answer is one point two three percent, input 1.23)

Enter answer here

6.94

Long-term debt instruments

1. Go to the Economic Research website (FRED) maintained by the Federal Reserve Bank of St. Louis:

https://research.stlouisfed.org/datatrends/mt/page8.php

Using the first graph and the data on the Federal Reserve Bank of Philadelphia Survey of Professional Forecasters and the University of Michigan Survey Research Center’s Survey of Consumer, look up what the professionals’ consensus forecast for inflation rate over the next year is. What do the consumers expect to happen to inflation over the next year?