Q: The coupon rate is calculated on the bond's face value for par value). not on the issue price or…
A: Coupon rate is the interest rate for periodic interest payments on the bond. Value of the bond =…
Q: Why does the yield on a discount bond surpass the coupon rate
A: Introduction:The bond will trade at a discount if the yield to maturity (YTM) exceeds the coupon…
Q: j. If interest rates increase after a bond issue, the yield-to-maturity will ______,
A: if interest rates increase then the then the return will increases then automatically yield to…
Q: Describe in detail the key features of a bon value, maturity, coupon rate, coupon, yield maturity,…
A: Bonds are debt instruments that carry the interest payments to be paid each period and face value on…
Q: dentify the price of the following and draw each in a graph with market interest rate on the…
A: Assuming N= 1 year ,as it is not given in question Present value of bond = C/(1+r)1 + C/(1+r)2…
Q: Why s the realized compound yield to maturity and yield to maturity of zero coupon bond always the…
A: Zero-Coupon or Deep-Discount Bonds are issued at price lower than their face value and no periodic…
Q: e. If the bondholder’s required rate of return equals the coupon interest rate, the bond will sell…
A: If the bondholder’s required rate of return equals the coupon interest rate, the bondwill sell at…
Q: Bond price is: O Inversely related to cOupon rate and positively related to interest rate. O…
A: Bond are fixed interest bearing instrument that is issued to raise funds and has a fixed matuity…
Q: The relationship between bond prices and the interest rate bonds pay: Seleccione una: a. is Positive…
A: Companies issue bonds in order to meet their requirements of funds. Companies pay a fixed rate of…
Q: Why does the yield of a bond that trades at a discount exceeds the bond’s coupon rate?
A: Where yield to maturity(YTM) is exceed coupon rate payable on bond, the bond will trade at discount.…
Q: The dollar interest received divided by the market price of the bond is called the Group of answer…
A: current yield formula: current yield =dividendmarket price
Q: 5. What is the bond's annual coupon rate?
A: Bond Current Yield: Bond current yield refers to the bond's annual income which includes coupon…
Q: What is the connection between the interest rate and the price of a fixed-coupon bond? Why is it…
A: Interest rate is the rate that is prevailing in the market on which you can invest your money. Fixed…
Q: Assume that the formula for the coupon rates of a floater and an inverse floater are: Floater coupon…
A: Reference rate = +1.5% Floater coupon rate = 12%
Q: yield on bond is 7% and the market required return is 14% then market risk premium is ____?
A: Market risk premium is excess of required return from market over return earned from risk free…
Q: The rate of return earned on a bond if it is held until maturity is its: Group of answ
A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…
Q: State whether the following statement is True or False and explain why. “A bond’s price is higher…
A: Generally, when the bonds fixed coupon rate is the amount of fixed annual interest paid by the…
Q: Which one of the following is most likely fixed for the life of a given bond? O Current price Coupon…
A:
Q: 4. In which of the following situations will the book value of a bond be equal to its maturity…
A: The market rate is the yield rate in the market on bond and the coupon rate is the rate which is…
Q: 27. Which of the following statements is most correct? a. The current yield on Bond A exceeds the…
A: Please find the answer to the above question below:
Q: For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to…
A: Discount bond is a bond that is issued for less than its par value or face value. Discount bonds…
Q: 6. Which of the following statements is (are) correct? O A. All else equal, if a bond's yield to…
A: The fixed rate of instruments that are used by the organization in order to raise the finance for…
Q: Explain the difference between the coupon rate and the required return on a bond.
A: Coupon rate : Coupon rate is the rate that is paid periodically. The coupon rate is the amount of…
Q: which of the below does not qualify a bond ? a. Time to maturity b. Par Value c. Coupon rate d.…
A: Bonds are a sort of financial instrument used by governments and enterprises to raise funding from…
Q: The stated yield to maturity and realized compound yield to maturity of a (default-free) zero-coupon…
A: Answer: The realized compound yield is nothing but the maturity yield on the bond assuming that the…
Q: All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity.…
A: Bond Coupon rate and YTM rate determines whether it will sell at discount, premium or at par.
Q: 6. Which of the following statements is (are) correct? O A. All else equal, if a bond's yield to…
A: Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it…
Q: a. Calculate the yield to maturity (YTM) for the bond. b. What relationship exists between the…
A: Yield To Maturity: It refers to the total rate earned by the bondholder for holding the bond till…
Q: A bond’s coupon rate is more than the interest rate, therefore the bond is selling at a
A: BOND COUPON RATE- Coupon rate is that the rate of interest paid by bond issuers on the bond's…
Q: (a) Calculate the price of the bonde (b) Suppose the bond is a consol with an annual coupon of 45.…
A: Bd = 2360- 0.8P Bd= Number of Bond P= Price When, Supply of the Bond is fixed 1400, Hence,…
Q: Question 3 Which of the following statements is CORRECT? O If a bond's yicld to maturity exceeds its…
A: Bonds means an instrument issued by company acknowledging the debt due from company to bond holder.…
Q: A bond is sold at OA) par; less than. OB) C) D) if the YTM (yield to maturity) is par; higher than.…
A: The bonds are the financial instruments of the business that are used to raise the money from the…
Q: What is the difference between a bond's coupon rate and its required return
A: A financial instrument is a bond. The issuer issues a bond to raise funds and repay the money at the…
Q: Given all else equal, if the yield to maturity of a Treasury bond decreases substantially, generally…
A: Yield to maturity the rate of return that bond hider will get if they hold such bond till maturity…
Q: Current yield is used to determine Seleccione una: a. A portion of the yield on an investment b. The…
A: Bonds are debt securities containing interest payments. Bonds could be issued and redeemed at par…
Q: a) In each of the following parts, write an expression that shows the relationship among the listed…
A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
24. ( ) is the coupon rate that causes the
A. Zero rate B. Bond yield C. Par yield
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Solved in 2 steps
- 7. Explain in detail, in terms of current yield, capital gain yields and YTM, why: a) If YTM = coupon rate, bond price = par value? b) If YTM > coupon rate, then bond price < par value? c) IF YTM < coupon rate, then bond price > par value? AND also give the name of the bond in each scenario.2 The rate of return earned on a bond if it is held until maturity is its: Group of answer choices sinking fund yield. yield-to-maturity. coupon payment. yield-to-call.a) All things being equal If a bond's coupon rate is higher than its yieldto maturity (YTM), is the bond selling at a discount, premium or par?b) All things being equal If a bond's coupon rate is lower than its yield tomaturity (YTM), is the bond selling at a discount, premium or par?c) All things being equal If a bond's coupon rate is equal to its yield tomaturity (YTM), then is the bond selling at a discount, premium or par?d) All else being equal, the longer the term to maturity, the greater orthe lower the duration?f) All else being equal, the higher the coupon rate on the bond, theshorter or the longer the duration of the bond?
- D3) Show that a variable rate bond is priced at par if the coupons are paid with reference to the rate curve with which the flows are discounted.The coupon rate is greater than the yield to maturity when a bond sells at a premium. Select one: True FalseWhat will be the price of a bond in which the YTM is higher than the coupon rate? a. Below face value b. At face value c. Above face value d. Cannot be determined
- Bond price is: O Inversely related to cOupon rate and positively related to interest rate.O Positively related to coupon rate and inversely related to interest rate.O Positively related to coupon rate and interest rateO Inversely related to coupon rate and interest ratee. If the bondholder’s required rate of return equals the coupon interest rate, the bondwill sell at _________.All else equal, a bond would be sold at __________ if its coupon rate is _________ its yield to maturity. a. premium, lower than b. par, equal to c. discount, greater than d. discount, equal to
- which of the below does not qualify a bond ? a. Time to maturity b. Par Value c. Coupon rate d. Yield to Maturity e. Current yieldAll else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. A. a discount; less than B. a discount; higher than C. a premium; equal to D. a premium; less thanWhat is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? If the bond is called, the capital gains yield will remain the same but the current yield will be different. If the bond is called, the current yield and the capital gains yield will both be different. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different. If the bond is called, the current yield will remain the same but the capital gains yield will be different. If the bond is called, the current yield and the capital gains yield will remain the same.