Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

Finra Series-7 Exam - Topic 7 Question 3 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 3
Topic #: 7
[All Series-7 Questions]

Bubba buys a 5% bond that matures in 15 years with a 5.10 basis. How much did he pay for the bond?

Show Suggested Answer Hide Answer
Suggested Answer: B

98.96. A calculator is not required for this. Even Bubba knows the bond is obviously trading at a slight discount by yielding 5.10% instead of the coupon rate of 5%. If the yield was the same as the coupon rate, the price is 100.00.


by Dottie at May 07, 2022, 05:17 AM

Limited Time Offer

25%

Off

Get Premium Series-7 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Phuong
5 months ago
5% bond with a 5.10 basis? Interesting combo!
upvoted 0 times
...
Latricia
6 months ago
I thought bonds were usually at par or above.
upvoted 0 times
...
Mariko
6 months ago
Wait, is it really that low? Sounds off to me.
upvoted 0 times
...
Becky
6 months ago
Definitely B, makes sense with the basis.
upvoted 0 times
...
Kallie
6 months ago
He probably paid around 98.96 for that bond.
upvoted 0 times
...
Zona
6 months ago
I’m confused about whether the bond price should be above or below par. I think I need to double-check how the basis affects the price calculation.
upvoted 0 times
...
Charlette
6 months ago
I feel like the answer should be lower than 100 since the basis is higher than the coupon rate. Maybe it's B?
upvoted 0 times
...
Paz
6 months ago
This seems similar to a practice question we did on bond pricing. I think the basis points might help us find the price, but I can't recall the exact formula.
upvoted 0 times
...
Iluminada
6 months ago
I remember something about calculating the price of a bond based on its yield and coupon rate, but I'm not entirely sure how to apply it here.
upvoted 0 times
...
Alisha
6 months ago
Optimizing the BGP route table by exporting IGP routes into BGP is a common technique, but I don't think it's considered a best practice. I'll rule that one out.
upvoted 0 times
...
Lauran
6 months ago
I'm pretty confident about this one. The key is to identify the false statement, which seems to be option C.
upvoted 0 times
...

Save Cancel