In most bond analysis, we use ________ because it is the remaining maturity of a bond that matters. No choice given Bond's maturity Call date Life of the bond Annuity
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In most bond analysis, we use ________ because it is the remaining maturity of a bond that matters.
No choice given
Bond's maturity
Call date
Life of the bond
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- If interest rates rise after a bond issue, what would happen to the bond's price and YTM? Does the time to maturity affect the extend to which interest rates changes affect the bond price? (Please give an example)If interest rates rise after a bond issue, what will happen to the bond’s price and YTM? Doesthe time to maturity affect the extent to which interest rate changes affect the bond’s price?(Again, an example might help you answer this question.)Which of the following is TRUE about a bond's face (par) value? Select one: a. the face value of a bond is the same as the bond's price b. the par value of a bond is the interest payment c. the face value of a bond changes when yields change d. the value of a bond will always be equal to par at maturity.
- Is it true that on the date of maturity, a bond does not carry any interest rate risk? Briefly explain.It is the amount of money that will receive at the bond's maturity date. coupon discount rate par value interest plus penalty principal plus interest no choice givenA bond that is characterized by a fixed periodic payment schedule that reduces the bond’s outstanding principal amount to zero by the maturity date is best described as a: Bullet bond Plain vanilla bond Fully amortized bond
- A bondholder with a short-term bond is exposed to............. interest rate risk than when owing a long-term bondWhich 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 risesWhich 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 unanswered
- Why is the required rate of return on a bond different than the copoun rateFor a bond issue that sells for less than its face value, the market rate of interest is a. Higher than the rate stated on the bond. b. Dependent on the rate stated on the bond. c. Equal to the rate stated on the bond. d. Less than the rate stated on 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 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 ______,