Exam IFM (Investment and Financial Markets) Bonds Practice Questions
The free Exam IFM (Investment and Financial Markets) questions that deal with bonds, with answers and explanations. The full bank and the timed practice test cover every topic the exam asks about.
Question #1
A portfolio consists of 70% stocks and 30% bonds. If stocks return 10% and bonds 5%, what is the expected return?
Correct answer: A
Explanation
The expected return is calculated as (0.70*10% + 0.30*5%) = 8%.
Question #3
If the interest rate rises, what happens to the price of existing bonds?
Correct answer: A
Explanation
Generally, bond prices inversely relate to interest rates; they decrease when rates rise.
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