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单项选择题

Based on the following information to answer questions from 39 to 40:
A mortgage-backed security has been divided into three classes or tranches as follows:
Tranche Ⅰ receives net interest and all the principal payments until it is completely paid off.
Tranche Ⅱ receives its share of net interest and starts receiving all the principal repayments after
Tranche Ⅰ has been completely paid off. Prior to that, it only receives interest payments.
Tranche Ⅲ receives monthly net interest and starts receiving all principal repayments after
Tranches Ⅰ and Ⅱ have been completely paid off. Prior to that, it only receives interest payments. A bond portfolio manager owns $ 5 million par valfie of a noncallable bond issue. The duration of the bonds is 5.6 and the current market value of the bonds is $5125000. If yield decline by 25 basis points, the approximate new price of the bonds after the decline in yield will be closest to:

A. $5053250.
B. $5070000.
C. $5196750.
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单项选择题An investor most concerned with reinvestment risk would be least likely to:

A. eliminate reinvestment risk by holding a coupon bond until maturity.
B. prefer a lower coupon bond to a higher coupon bond.
C. be more concerned in a decreasing interest rate environment.

单项选择题Which of the following is TRUE about a bond with a deferred call provision

A. It could be called at any time during the initial call period, but not later.
B. It could not be called right after the date of issue.
C. Principal repayment can be deferred until it reaches maturity.