How is the price determined for a bond (or bond issue)?

Q: Define Bond Premium

A: Bond premium: It is the amount because of which the purchase price of bond is more than the par…

Q: What is the excess of the issue price of bonds over their face amount called? premium discount…

A: Premium on Bonds: When bond market costs higher than its face value then bonds is called at premium.…

Q: What is the relationship between bond prices and interest rates? Describe the process of…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

Q: What factors affect the market rates for bonds?

A: In general, the supply of and demand for bonds affect market rates. The market rate for particular…

Q: What is the cost of a long-term investment in bonds?

A: Bond: Bonds are long-term debt issued with the defined terms and conditions. Bonds are generally…

Q: Is current yields affected by whether the bond is callable ?

A: A callable bond is a bond where the institution that issues the bond has the option to prematurely…

Q: The market interest rate related to a bond is also called the

A: The market interest rate related to a bond effective interest rate.

Q: How do you calculate the price of bonds if you have the par value, contract rate, and market rate

A: This question teals about If you know the par value, contract rate, and market rate of bonds, you…

Q: Discuss how the amount of time before a bond matures affects the link between market interest rates…

A: This question considers how the amount of time until a bond matures influences the relationship…

Q: . How is the value of a bond determined?

A: Bond valuation: It may be a method utilized to decide a given bond's hypothetical reasonable value.…

Q: Interpret the distinction between real and nominal interest rates

A: Introduction: The term interest rate can be defined as the amount which is due on the proportion of…

Q: The amortization on a bond premium:

A: The amortization on a bond premium: (d) Is calculated by multiplying the bond’s carrying value by…

Q: When a bond is issued, what is its present value?

A: The present value of the bond is the total of the present value of the bond's interest payments that…

Q: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: What is the stated rate for a bond?

A:

Q: What are income bonds and indexed bonds?

A: The income bond is a type of debt instrument wherein the borrower is relied upon to pay just the par…

Q: What is the carrying amount of a bond?

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

Q: How is the price of a bond (or bond issuance) determined?

A: solution concept coupon rate of bond               The coupon rate of the bond is the stated…

Q: Explain the various types of bond. How are bonds traded in the market?

A: A bond is a debt security that is issued by many large entities and governments to borrow funds on a…

Q: What is a bond payable?

A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…

Q: Define capital gains yield (on a bond)

A: The formula to compute capital gain yield as follows:

Q: How is an interest payment on a bond calculated?

A: Bonds are debt instruments issued by corporations with a fixed interest rate(coupon rate) and…

Q: When does a discount on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: what is the current yield of the bond?

A: Current Yield of Bond: it is can be said as the yield obtained by a bond on current price or how…

Q: what is the principal amount repaid at the maturity of a bond is called?

A: Bond is a debt instrument which is issued by corporates or governments to raise funds for any…

Q: What is return formula for bond?

A: Solution-      Bonds-                  A bond is a fixed financial gain instrument that represents a…

Q: Why is it necessary to amortize the discount and premium on bond issues?

A: Introduction:   Bonds may be sold at a discount, at a premium, or at face value.

Q: Discuss how the duration of a bond's maturity affects the link between market interest rates and the…

A: This question explains about the duration of a bond's maturity affects the link between market…

Q: What are bond issue costs? What is an underwriter?

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…

Q: What is the dollar price of the bond?

A: Bond valuation is the process of determining the fair price of the bond. The fair price determines…

Q: Why discount and premium on issue of bonds is amortized?

A: Bonds are intangible assets, the amortization is similar to depreciation, it means systematically…

Q: In regard to a bond discount or premium, what is the effective-interest amortization method?

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

Q: What is the straight-line amortization approach with regards to a bond discount or premium?

A: Bond with a straight-line amortization schedule: The straight-line amortization technique is a way…

Q: What is the relationship between bond price and interest rate? Describe in fully how this…

A: Bonds are referred to as those investment securities which are issued by companies as units of…

Q: How does accrued interest on a bond affect the purchase price?

A: Interest on bond is normally paid semi annually. When a bond is transferred in between these…

Q: In regard to a bond discount or premium, what is the straight-line amortization method?

A: Straight-line amortization bondStraight line method of amortization is a process of amortizing…

Q: Which costs are included in bond issuance costs? How are they recorded?

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

Q: Describe the process to record a bond a face value, discount value and premium?

A: Bonds payable are financial instruments. It representing a company’s commitment to pay back a…

Q: Define a floating-rate bond and give examples

A: Floating-rate bond is a bond pays a variable interest rate.  The interest rate is depends on a…

Q: a) What are the important bond features. Describe each feature what they indicate. What are Discount…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: What is the relationship between interest rate level and bond price? Why must this relationship be…

A: Bonds are a type of long-term debt often offered by government and corporations to raise loan.

Q: Explain the relation between the bond value and yield of a Bond

A: The bond is a debt instrument that is issued by the organization to raise the funds from the…

Q: What is the effective-interest amortization mechanism for a bond discount or premium?

A: Method of interest amortization that is effective: Interest expenditure is calculated as follows:…

Q: What is the straight-line amortization technique for a bond discount or premium?

A: Bond with a straight-line amortization schedule The straight-line amortization technique is a way of…

Q: How do I calculate the value of a bond

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…

Q: what do the bonds yield at the following prices?

A: The Yield To Maturity (YTM) is one one the method used to find out the price of bond. It gives the…

Q: /hat is the issue price of the bond? (FV ples provided.)

A: Issue Price of the Bonds = Present Value of the Face Value of the Redemption + Present Value of the…

Q: Determine the selling price of the bonds

A: The selling price of the bonds is the present value of the cash payments to be made during the life…