What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Fixed Income
Bond Valuation practice questions
Bond Valuation is part of CFA Level I Fixed Income. Fixed Income questions focus on bond cash flows, yield measures, duration, convexity, credit risk, securitization, and curve interpretation. Use this page to review the controlling ideas, then work through 5 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Fixed Income
Bond Valuation
A 5-year bond with face value USD1,000 pays a 6% annual coupon semiannually. Its yield to maturity is 7% compounded semiannually. The full price on a coupon date is closest to:
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Bond Valuation
A 7-year bond pays a 5% annual coupon semiannually and is priced at 94.25 per 100 of par on a coupon date. The annualized yield to maturity with semiannual compounding is closest to:
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Bond Valuation
A bond with face value USD1,000 pays a 6% coupon semiannually. The last coupon was paid 110 days ago, and there are 180 days in the coupon period. The quoted flat price is USD1,012.40. The full price is closest to:
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Bond Valuation
Two option-free bonds have the same maturity and yield. Bond X has a 3% coupon and Bond Y has a 7% coupon. The current yield is below the YTM for X and above the YTM for Y. The bonds are most likely trading, respectively, at:
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Bond Valuation
An illiquid 4-year 4.8% corporate bond with no recent trades is valued using yields on traded bonds of similar credit quality and maturities of 3 and 5 years. This valuation method is best described as:
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