a bonds interest rate risk is lower if the bond has a _____ maturity and a ____ coupon rate

Q: What does a bond’s coupon rate refer to? Investment grade bonds have what range of S&P credit…

A: Bond's coupon rate refers to interest paid to the issuers on the bond's face value.

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: 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: Define the word "bond price elasticity." Would the elasticity of bond prices suggest that…

A: Introduction: Bond price elasticity refers to the degree to which a bond's price is sensitive to…

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: Since bonds always come with a coupon rate, why is it still important to check the yield to maturity…

A: Bonds pay periodic coupons which is calculated as a percentage of the face value of the bond. It is…

Q: Which type of bond is likely to pay a coupon payment that is varying (i.e. it changes over time) ? O…

A: Bonds act as long-term debt for the issuer as the issuer is under the obligation to pay regular…

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: 2. For each of the following situation, identify whether a bond would be considered a premium bond,…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: when the bond price is above par or at a premium?

A: Coupon: Coupon is the annual or semiannual payment will be made by the issuer of the bond to its…

Q: Under what conditions will a discount bond have anegative nominal interest rate? Is it possible for…

A: A discount bond is a bond that is issued for less than its par—or face—value. Discount bonds may…

Q: What will be the price of a bond in which the YTM is higher than the coupon rate? a. Below face…

A: The bond value can be determined looking at the relationship of coupon rate and YTM.  If the YTM of…

Q: Which of the following is correct? a. The YTM of a bond is its IRR b. Call premium rises as a bond…

A: YTM of bond is the rate of return that the bondholder will get if they hold bond till maturity and…

Q: Which of the following conditions will increase the interest rate risk on a bond? shorter time to…

A: Interest rate risk is referred to as the potential regarding an investment losses due to the change…

Q: nterest rate risk refers to changes in the bond's     ______________ (coupon rate, credit rating,…

A: Interest rate risk: It refers to the risk occured with changes in interest rate. It is also known as…

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: Which type of bonds offer a higher yield? Callable bonds Noncallable bonds Answer the following…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What’s TRUE regarding long-term and short-term bonds (assume they have the same par value and coupon…

A: Interest Rate Risk: It is the chance of a decline in the value of security due to changes in…

Q: A bondholder with a short-term bond is exposed to............. interest rate risk than when owing a…

A: Short term bonds are those bonds which are held for a period for less than one year. Long term bonds…

Q: Which one of the following statements is true regarding bond valuation? a. When yield to maturity is…

A: Solution:- Bond value means the value at which the bond trades currently trades in the market. It…

Q: f a bond’s coupon rate is greater than the investor’s required rate of return on the bond, would the…

A: Prices of bond depend on required rate of return on the bond and the prices of bond changes with…

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: Interest rate risk; a.is lesser for bonds with a longer term as compared to bonds with a shorter…

A: The risk of investment losses due to the shift in interest rates is known as interest rate risk. It…

Q: Which of the following statements is false?   A.   Other things being equal, an increase in a…

A: A bond is a fixed income instrument, that is used by borrowers to raise money at a certain interest…

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: o coupon bond has more interest rate risk than a comparable coupon bond.    true or false

A: Zero coupon bond do not have any coupon payment and face value is paid on the maturity and in coupon…

Q: Bond Relationships. Select one or more of the following phrases to complete the following sentences.…

A: Bond is a contract under which a borrower promises to pay interest and principal on a specific dates…

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: What happens when the bond's market rate is greater than the stated rate?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Which type of bonds offer a higher yield?

A: Bonds are fixed-income instruments representing a loan made by an investor to the government or…

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: Which of the follwing statement is correct. As the credit risk of a bond increases: A. The YTM…

A: Credit risk is risk of default of bond issues and as credit increase the required rate on bonds…

Q: Which one of the following bond values will change when interest rates change? O The expected cash…

A: Value of a bond is the present value of the future cash flows discounted at a required rate of…

Q: how will the modified duretion of a floating coupon bond be compared to the modified duration of a…

A: A bond is a financial product that represents a loan that an investor makes to a borrower (usually a…

Q: If the stated interest rate exceeds the market interest rate, a bond will sell at a premium. True or…

A: Bonds are the financial instruments, which are issued so as to raise debt with a fixed interest…

Q: Should the rate of return of a call option on a long-term Treasury bond be more or less sensitive to…

A: The financial contracts available which give the buyer the right to buy a stock or underlying asset…

Q: Risk free rate can be derived from a triple A rated commercial bonds and the estimated price of…

A: The risk-free rate is an interest rate that an investor expects for the investment in the risk-free…

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: 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…