Interest-rate risk results from: a. Bond prices being fixed over the life of the bond b. Inflation being uncertain c. A mismatch between an individual's investment horizon and a bond's maturity d. The fact that most people hold bonds until they mature

Q: What is NOT considered as a disadvantage of investing in corporate bonds?    can be defaulted on…

A: The corporate bonds are issued to raise fund. Such bonds are considered fixed income securities.

Q: Risk premiums on corporate bonds are usually anticyclical; that is, they decrease during business…

A: Risk-premium is the term used to define an additional gain from the investment to reduce the risk…

Q: rm a issues a bond today it will pay $100,000 on the bond which includes 3% interest in one year how…

A: The bond Price after one year is $100,000 which includes a 3% interest rate. Assume at the present…

Q: If the supply of bonds falls, then bond prices O will generally rise O interest rates will generally…

A: Bond price is determined by the intersection of demand(for bonds) and supply(for bonds). The supply…

Q: Deliberate specifally how and through which channelss the interest rate affects (negatively or…

A: Interest rates can impact the economic activities in different ways. When the interest rates are…

Q: ______________ is a method of measuring the value of a section of the bond

A: In economic, bond market is referred to the place where exchange of bonds take place.

Q: Say that a bond pays $12 in interest and has a current price on secondary markets of $132. Then the…

A: here we can find the current yield of bond as follow

Q: Answer the question based on the following information for a bond having no expiration date: bond…

A: If income is $18 and price of X is $4 and price of Y is $2. Units of X MUx MUx/Dollar…

Q: Which is TRUE about inflation and interest rates? * a. None of the choices. b. The inflation…

A: Which is TRUE about inflation and interest rates? *

Q: 26) Use demand and supply analysis (draw fully labelled graph) to explain why an expectation of…

A: There are some assumptions in the law of demand. The law of demand states that" other things being…

Q: Which of the following is true of risk premium? a. The speculative corporate issues have a lower…

A: Risk premium is the excess return a firm or corporate provides when the investment is risky. Higher…

Q: You will be LESS likely to buy bonds if: Stock prices become more volatile. You expect interest…

A: Individual investors seeking pay or the conservation of capital regularly consider adding bonds to…

Q: Draw and label the bond market graph covered in chapter 5. Then, using the graph, Illustrate and…

A: When there is decrease in the profitability of business investments, the businesses will invest…

Q: Give two specific examples of "wealth," which may lead to the increase in the demand for bonds,…

A: Answer -

Q: Discuss how the concepts of pure security,short selling and no arbitrage profit help establish and…

A: Capital market equilibrium requires that market prices be set so that supply equals demand for each…

Q: If the quantity of bonds demanded exceeds the quantity of bonds supplied, bond prices: Answer a.…

A: The quantity of bond demanded and supplied depends upon the price of the stock or bond. When the…

Q: If there is a decreased demand for a financial asset. its yield will rise its current purchase price…

A: Demand for bonds shows that there exists an inverse relationship between the price of the bond and…

Q: An increase in the supply of bonds is expected to:   A. Decrease bond prices   B. Increase bond…

A: A bond is an instrument of indebtedness, a fixed income earning investment. Bonds can be categorized…

Q: Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What…

A: Bonds are tradable assets that are securitized versions of corporate debt issued by businesses.…

Q: Rate of Return 1. If a bond has a current yield of 6% and a rate of return of 2%, it has a capital…

A: The rate of return is a metric used to calculate an investment's profit or loss over time.A rate of…

Q: 6. Everything else held constant, a decrease in wealth A) increases the demand for stocks B)…

A: Wealth is the individual's net worth. It is the accumulation of money, assets held by an individual…

Q: financial markets that function well: a. increase the ease of converting common stocks into bonds…

A: A well functioning financial markets has following features:- Reduce riskiness of the most assets…

Q: If junk bonds are called "Junk" Why then would as an investor buy Junk bonds?   Explain your reasons…

A: Junk bonds are bonds which carry a higher default risk than most corporate and government issued…

Q: Explain the bond markets in the real world.

A: A bond is an advance that the bond buyer, or bondholder, makes to the bond backer. Governments,…

Q: When stock prices become less volatile, the _ curve for bonds shifts to the a. demand; right b.…

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

Q: . Duration is an accurate measure of the relationship between percentage changes in a bond price and…

A: Duration can be defined as a tool for estimating how long it takes, in years, for an investor to pay…

Q: Use the model of supply and demand for bonds to illustrate and explain the impact of each of the…

A: The equilibrium quantity and prices of bonds are dependent on the demand and supply of bonds. Also,…

Q: A bond provides a fixed return on the buyer’s investment. True or false

A: Interest rate: - it is the percentage charge on the principal amount by a lender to a borrower.

Q: Trace the impact of selling more bonds by government on bond prices, interest rates, investment,…

A: Impact of selling bonds on various factors cam be shown as follows:   Bond prices: When the supply…

Q: Which of the following is TRUE about bonds? * a. If the bond price is greater than its par value,…

A: Par value refers to the face value of a bond that issuer is ready to repay the bond holder at the…

Q: When do you release a retentiong guarantee/bond?

A: A retention bond is a kind of performance bond that protects the customer in the scenario when the…

Q: What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity…

A: As it is given in the question that Time n=5 YTMR = 5% current price =$1,000

Q: What will happen in the bond market if the government imposes a limit on the amount of daily…

A: If the government imposes a limit on daily transactions, then the ones who buy and sell in the…

Q: What type of open market operation is expansionary? (Is it a purchase or sale of bonds?)

A: Open market operations refer to purchase and sale of bonds

Q: Federal insurance of bank deposits insulates depositors from​ risks, so depositors are (less or…

A: Answer The bank managers have an incentive to invest in riskier assets to make higher rates of…

Q: Find readings or videos on the internet with information on the factors that move the demand and…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Question 38 I Long-term bonds are generally A less risky than short-term bonds and so pay higher…

A: Long term generally refers to a period of maturity which lies between 10 years to 30 years.

Q: Which of the following is TRUE for a coupon bond?   Select one: a. The yield to maturity is…

A: A coupon bond is bond which refers to debt obligation of the individual or a firm, Coupon bond rate…

Q: Why is the relationship between price and yield negative? a. Because investors reward higher…

A: The formula for bond price calculation is given by: Bond Price = ∑i[ C/(1+r)n + F/(1+r)n] where i…

Q: What is the relation between Cash Flow Risk and Interest Rate Risk in the Bond Market? Please…

A: Cash Flow Risk is that the term wont to describe the potential danger of falling short created by…