Explain the difference between the yield to maturity and the yieldto call.

Q: Explain the differences between yield-to-maturity and yield-to-call

A: While both yield to maturity and yield to call are related to bonds they are not the same thing.

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Explain the term Annual Effective Yields?

A: Annual effective yield: Annual effective yield is defined as the simple rate of interest that gives…

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: Factors that Affect Yield to Maturity

A: A bond's yield to maturity depends basically on its present value, coupon rate and the time to…

Q: How do maturity risk premiums affect the yield curve?

A: A premium, which a borrower pays to the lender in the form of compensation of interest rate…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: ected rate of return concept differ from that of the rea

A: There are many method of valuation of stock based on expected rate and realized return and dividends…

Q: Which are the two computational schemes for calculating this earned interest yield?

A: The two computational schemes for calculating the earned interest yield are compound interest scheme…

Q: How to calculate yield to maturity

A: Yield to Maturity: The yield to maturity (YTM) of a bond is the cumulative return expected if the…

Q: What is the Fixed Charge Coverage Ratio? • What is the Earnings Yield Ratio?

A:

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: The formula of which of the following considers the percentage change in price? a. Total expected…

A: Percentage change in price Percentage change in price involves two prices of two different periods.…

Q: What is the relationship between the price, coupon rate  and market yield?

A: The coupon rate is the bond's interest rate. The coupon rate is not the same as the market interest…

Q: What is a yield curve? What does it mean when the yield curve is inverted?

A: Yield curve tells the relationship between the short term interest rates and long term interest…

Q: Define each of the following terms:m. Term structure of interest rates; yield curve

A: Term structure of interest rates: Term structure of interest rates is defined as the association…

Q: What are the different terms used to refer to the rate of return?

A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…

Q: Describe and link the following terms: a) Normal yield curve b) Term structure of interest rates c)…

A: Yield curve estimates the future rate of interest of bonds. Future rate of interest of bonds is the…

Q: Explain a flat yield curve using the segmented market theory.

A: Mаrket  segmentаtiоn  theоry  is  а  theоry  thаt  lоng  аnd  shоrt-term  interest  rаtes  аre  nоt…

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Explain how a yield curve is constructed.

A: Yield curve is referred to as the line, which used to plot yields that are interest rates of the…

Q: A) What was your expected yield to maturity? B) What was your actual rate of return?

A: The yield to maturity (YTM) is the annual percentage rate of return on a bond if the investor…

Q: Define yield.

A: Yield can be considered as a metric for cash flow for the investor on the amount with which a…

Q: Define yield to maturity (YTM)

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: How do you calculate yield to maturity?

A: The yield to maturity is nothing but the interest rate of a bond. It can also be termed as the…

Q: Outline the mean-variance approach to hedge ratio construction. What are the speculative demand and…

A: A hedge ratio is the ratio of exposure to a hedging instrument to the value of the hedged asset. A…

Q: Using the IRR func1ion in Excel, can we calculate the yield to maturity?

A: Yield to Maturity (YTM) is the rate of return that an investor will earn if the security is held…

Q: distinquish between current yield, coupon rate and yield to maturity

A: current yield is the yield of the bond at present moment.

Q: praş Calculate their yield to maturity.

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Q: Define equity residual model

A: Dividend discount model is one of the models used for the valuation of equity. This model considers…

Q: Use the ‘Liquidity Premium Theory’ to explain the shape of the yield curve.

A: Liquidity Premium Theory states that investors will require a higher rate of return(interest rate or…

Q: Explain an upward sloping yield curve using the pure expectation theory.

A: Pure expectation theory: Pure expectation theory states that expected future spot rates will be…

Q: Explain with example the Yield to Maturity?

A: A bond is a financial instrument that is issued by the government and the corporate to raise the…

Q: Briefly explain the difference between the CAPMand the Arbitrage Pricing Theory (APT)

A: The Capital Asset pricing model assists investors in computing the expected return on investing in a…

Q: What is the difference between yield to maturity and current yield? Explain

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: Plot the relation between duration and coupon rate

A: Longer-duration bonds have a greater period and are also exposed to a greater probability that…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.