A bond will sell at ____________ if the required return is greater than the coupon rate. Select one: a. A discount b. Liquidation value c. Par d. A premium
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- A bond’s expected return is sometimes estimated by its yield to maturity (YTM) and sometimes by its yield to call (YTC). The YTC is a better estimate when the bond sells at... a. a discount. b. a premium. c. par value.A bond will be priced at a discount to par value if its coupon rate is less than its yield-to-maturity (YTM). Select one: True FalseIf the bondholder’s required rate of return equals the coupon interest rate, the bond will sell at _______________. A premium bond sells for ____________ as maturity approaches. The discount bond sells for ____________ as maturity approaches.
- If a coupon-paying bond is selling at a discount, the bond's yield to maturity will be _______ than the bond's coupon interest rate. less equal moreThe coupon rate is greater than the yield to maturity when a bond sells at a premium. Select one: True FalseExplain briefly whether a zero-coupon bond will be selling (i) at a premium, and (ii) at par.
- All 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 thanhow will the modified duretion of a floating coupon bond be compared to the modified duration of a fixed rate coupon bond? (same, higher or lower?) (floating coupon adjust coupon accotding to interest rate level, ie higher interest rate results in higher coupon payment)A bond has a market price that exceeds its face value. Which one of these features currently applies tothis bond?Select one:a. Yield to maturity less than the coupon rate.b. Currently selling at par.c. Current yield greater than coupon rate.d. Yield to maturity equal to the current yield.e. Discount bond.
- Bond Relationships. Select one or more of the following phrases to complete the followingsentences. increase , decrease, par, discount, premium, less than, more than, greater , lessa. If the current interest rate exceeds the bond’s coupon rate, the bond will sell at a___________.b. The value of a bond to increase if there is a/an ________ in interest rates.c. A bond’s coupon rate is more than the interest rate, therefore the bond is selling at a_____________.d. As interest rate increases the value of a bond will ______________.e. If the bondholder’s required rate of return equals the coupon interest rate, the bondwill sell at _________.f. A premium bond sells for ____________ as maturity approaches.g. The discount bond sells for ____________ as maturity approaches.h. A bondholder with a short-term bond is exposed to ___________ interest rate risk thanwhen owing a long-term bondAll else being constant, a bond will sell at __________ when the coupon rate is __________ the yield to maturity. Select one: a. a premium; equal to b. a premium; less than c. par; higher than d. a discount; less than Clear my choiceThe yield to maturity on a bond a is fixed in the indenture. b is lower for higher-risk bonds. c is the required return on the bond. d is generally equal to the coupon interest rate.
