CFA Institute Exam CFA-Level-I Topic 1 Question 11 Discussion

Actual exam question for CFA Institute's CFA-Level-I exam

Question #: 11
Topic #: 1

An investor buys a 25-year, 10 percent annual pay bond for $900 planning to sell the bond in 5 years when he estimates yields will be 9 percent. What is the estimate of the future price of this bond?

A$964.

B$1,000.

C$1,122.

D$1,091.

Show Suggested Answer

Suggested Answer: D

by Samuel at Jan 14, 2025, 11:49 PM

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Lavera

1 days ago

B) $1,000? Really? That's too easy. I bet the answer's gonna be something more complex, like C) $1,122.

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Cory

3 days ago

I agree with Zona, the future price should be $1,000 based on the decrease in yield.

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Cyril

4 days ago

D) $1,091 sounds about right to me. Time to break out the financial calculator and get this right!

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Zona

8 days ago

I disagree, I believe the future price will be $1,000 because the yield is decreasing.

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Carmen

15 days ago

Hmm, let's see. I'd say the answer is C) $1,122. Gotta love those compound interest calculations!

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Latrice

3 days ago

I think the answer is C) $1,122. The bond price will increase with lower yields.

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Glendora

16 days ago

I think the future price of the bond will be $964.

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