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In the Money Index Used by the Bank of Canada

question 60

Multiple Choice

In the money index used by the Bank of Canada: M = X1 + X2 + ... + Xn, the n monetary components have ________.


Definitions:

Premium To Par

The amount by which the price of a bond exceeds its principal (or par) value, often occurring when the bond's interest rate is higher than current market rates.

Coupon Rate

The per annum interest yield on a bond, shown as a percentage of its principal amount.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturation date.

Zero-Coupon Bonds

Bonds that do not pay interest during their lifetime but are sold at a discount to their face value, which is paid at maturity.

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