A bondholder with a short-term bond is exposed to............. interest rate risk than when owing a long-term bond
Q: The higher the credit rating, the __________ the bond, the __________ the default probability, and…
A: Consequently, bonds with the highest quality credit ratings always carry the lowest yields; bonds…
Q: A bondholder with a short-term bond is exposed to ___________ interest rate risk than when owing a…
A: A bond is a debt capital utilized by entities and governments to raise finance for their purposes.…
Q: The price of a bond is the present value of promised future payments to the bondholder. A) True B)…
A: Bonds are units of securitized corporate securities that companies issue in the form of tradable…
Q: Interest-rate risk results from: a. Bond prices being fixed over the life of the bond b. Inflation…
A: Interest rate risk refers to the sensitivity of the bond prices to the interest rate changes. There…
Q: Why is the required rate of return on a bond different than the copoun rate
A: Bonds are the debt securities which are issued by the corporates or the government to raise the…
Q: value of a bond will
A: Introduction: Bonds are defined as a fixed income instrument & is nothing but the loan which is…
Q: A premium bond sells for ____________ as maturity approaches.
A: Premium bond is a type of bond which is sold at a higher price than its face Value.
Q: If interest rates rise after a bond issue, what will happen to the bond’s price and YTM? Doesthe…
A: The bond's price and yield to maturity are directly affected by the increase in interest rates and…
Q: What is the A (single-A rated corporate bond) Default Risk Premium (rdp)?
A: Treasury bill rate 5 year bond: Treasury rate for 5 year A bond is 5.90%.
Q: To which type of risk are holders of long-term bonds more exposed? Short-termbondholders?
A: Interest rate risk arises because of the changes in the fluctuation of the interest rates. The tool…
Q: is the date when a bond matures and the principal must be repaid. Select one: O Coupon Rate O…
A: Bonds are a type of investment instrument that allows an investor to secure a specific quantity of…
Q: Describe the relationship between bond prices and inclation. would you be more inclined to buy bonds…
A: Bond prices have an inverse relation o interest rates. When the interest rates increase, the bond…
Q: When the bond reaches its ______ the company repays the / its _______ maturity date; creditor…
A: Bonds is a fixed income debt instrument issued by a company amd securitize as tradeable asset. Bonds…
Q: Briefly explain how the yield to maturity (YTM) of a corporate bond is calculated. Is this the…
A: YTM is the compounded annual rate of return earned on debt security purchased on given date and held…
Q: A) The rate of return on a bond is expected but the interest rate is unexpected.
A: Interest rates refer to the proportion of the loan which is to be paid by the borrower to the lender…
Q: Bond Relationships. Select one or more of the following phrases to complete the following sentences.…
A: The bond relationship includes the terms used in the bond valuation. It includes the interest rate,…
Q: The rate of return on a bond held to its maturity date is called the bond’syield to maturity. If…
A: It refers to the rate of interest earned till the maturity of the bond by the bond holder.
Q: If interest rates increase, after a bond is issued, the yield to maturity will _____________.
A: The YTM is merely a similar to the return on a bond because coupon payments cannot always be…
Q: The accrued interest on a bond is calculated by taking the fraction of the coupon period that has…
A: A bond is a financial security issued by large business firms to raise borrowing capital. A bond…
Q: a bonds interest rate risk is lower if the bond has a _____ maturity and a ____ coupon rate
A:
Q: If the bondholder’s required rate of return equals the coupon interest rate, the bond will sell at…
A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…
Q: Explain the differences between a bond's yield to maturity (YTM) and its yield to call (YTC). Is…
A: Introduction: The following are the distinctions between the yield to maturity and the profit to…
Q: if interest rates increase after a bond issue, the yeild-to-maturity will.......................?
A: The answer is provided in the next step.
Q: As the bond discount is amortized, the carrying value of the bonds will increase. True False
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: When interest rates __________, the market required rates of return ________, and the bond prices…
A: Because you have psoted multiple questions, we will answer the first question only, for the…
Q: ecarrying (book) value of a bond at the time when it is issued is always equal to its par valu True…
A: A bond may be issued at Par, at a premium or at discount. If the coupon rate of bonds is equal to…
Q: The coupon rate is identified on the bond indenture and determines the amount of cash payment for…
A: The answer along with the explanation is provided below.
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: Does the interest rate on a T-bond include a default risk premium? Explain.
A: Treasury bonds (T – Bonds) are the bonds which are issued by the U.S. Federal Government in form of…
Q: To identify: Yeild to maturity (YTM),yeild to call (YTC) and whether the YTM or YTC is more for the…
A: YTM (Yield to maturity): It relates to the interest rate earned by the bondholder for holding the…
Q: price of a long-term (longer-maturity) bond more or less sensitive to changes in interest rates than…
A: Long term bonds are more sensitive to change in interest rates than short term bond. If Interest…
Q: Interest-rate risk results from: Answer a. Bond prices being fixed over the life of the bond b.…
A: A bond is a type of debt security in which the issuer of a bond owes the holder debt and is obliged…
Q: Describe the differences between the yield to maturity (YTM) and the yield to call (YTC) on a bond.…
A: The differences between the yield to maturity and the yield to call on a bond are:
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: How is a bond’s duration impacted by varying the coupon rate? How is a bond’s duration impacted by…
A: 1. Bond duration and coupon rate have inverse relation that means if coupon rate increase then the…
Q: In most bond analysis, we use ________ because it is the remaining maturity of a bond that matters.…
A: A Bond's maturity can be defined as the period of the bond for which the bondholder will receive…
Q: The value of a bond to increase if there is a/an ________ in interest rates
A: An instrument that is issued by the company in order to raise finance for the long period is known…
Q: A bondholder with a short-term bond is exposed to ______________ interest rate risk than when owing…
A: A bond refers to the financial instruments which are issued by financial institutions for raising…
Q: If interest rates increase after a bond issue, the yield-to-maturity will ______
A: YTM is the rate of return at which Price of bond is equal to its PV of future cash inflows.
Q: If the bondholder's required rate of return equals the coupon interest rate, the bond will sell at…
A: Introduction: Bonds: When company require funds then they go by issuing bonds. Bonds pay interest…
Q: if an investor expects interest rates to _______________ she/he will choose a bond with
A: A bond is a debt component issued by the entity for generating cash. It is recorded as non-current…
Q: The rate of interest actually earned by bondholders is called the Select one: O a. effective rate. O…
A: Solution Concept If the coupon rate of bond is greater than the market rate of interest , bond is…
Q: Which type of bond is likely to pay a coupon payment that is varying (i.e. it changes over time) ?…
A: Bonds act as long-term debt for the issuer as the issuer is under the obligation to pay regular…
A bondholder with a short-term bond is exposed to............. interest rate risk than when owing a long-term bond
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- A bondholder with a short-term bond is exposed to ______________ interest rate risk than when owing a long-term bond. When interest rates __________, the market required rates of return ________, and the bond prices will ________.h. A bondholder with a short-term bond is exposed to ___________ interest rate risk thanwhen owing a long-term bond.i. When interest rates __________, the market required rates of return ________, and thebond prices will ________.j. If interest rates increase after a bond issue, the yield-to-maturity will ______,The price of a bond is the present value of promised future payments to the bondholder. A) True B) False
- a bonds interest rate risk is lower if the bond has a _____ maturity and a ____ coupon rateWhich of the follwing statement is correct. As the credit risk of a bond increases: A. The YTM falls and price of the bond falls B. The YTM increases and price of the bond falls C. The YTM falls and price of the bond rises D. The YTM increases and price of the bond risesBond Relationships. Select one or more of the following phrases to complete the following sentences. increase, decrease, par, discount, premium, less than, more than, greater, less, fall, rise a. As interest rate increases the value of a bond will ______________. b. The discount bond sells for ____________ as maturity approaches. c. When interest rates fall, the market required rates of return ________, and the bond prices will ________. d. If interest rates increase after a bond issue, the yield-to-maturity will ______,
- Which of the follwing statement is correct. As the credit risk of a bond increases: The YTM falls and price of the bond falls The YTM increases and price of the bond falls The YTM falls and price of the bond rises The YTM increases and price of the bond rises unansweredBond 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 bondWhich of the following is correct? a. The YTM of a bond is its IRR b. Call premium rises as a bond nears its maturity date c. If the market and coupon rates are equal, a stock sells for its par value d. A bond indenture is a contract between bondholders and bond investors
- An investor believes that a bond may temporarily increase in credit risk. Which of the following would be the most liquid method of exploiting this?a. The purchase of a credit default swap.b. The sale of a credit default swap.c. The short sale of the bond.Bond Relationships. Select one or more of the following phrases to complete the following sentences. increase , decrease, par, discount, premium, less than, more than, greater , less, fall, rise If the current interest rate exceeds the bond’s coupon rate, the bond will sell at a ___________. The value of a bond to increase if there is a/an ________ in interest rates. A bond’s coupon rate is more than the interest rate, therefore the bond is selling at a _____________. As interest rate increases the value of a bond will ______________. If 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. A bondholder with a short-term bond is exposed to ___________ interest rate risk than when owing a long-term bond. When interest rates __________, the market required rates of return ________, and the bond prices will…Describe the relationship between bond prices and inclation. would you be more inclined to buy bonds if you anticipate interest rates to rise fall.