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

Q: If you know the par value of bonds, the contract rate, and the market rate, how do you compute the…

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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 impact do interest rates have on bond prices? What are the basic assumptions that go into…

A: This question explains about the fundamental assumptions that go into establishing the value of a…

Q: Which of the following is considered the principal when figuring interest for a bond? effective…

A: Bonds   Bond is a long-term financial instrument issued by a company for which the company pays…

Q: In general, how is the rate on a floating-rate bond determined?

A: The bond that changes in interest entirety in line with market interest rates or a few other…

Q: value of a bond will

A: Introduction: Bonds are defined as a fixed income instrument & is nothing but the loan which is…

Q: What is the “call” feature of a bond issue? How does thecall feature affect the amortization of bond…

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Q: What role do interest rates have in the value of bonds? What are the fundamental assumptions that go…

A: Introduction: Bonds are a kind of debt owed by the corporation that must be paid back. Coupon…

Q: How do interest rates affect bond valuations? What are the key assumptions in valuing a bond?

A: Bonds are the form of debt payable by the company. Interest rates on bonds to be paid is coupon…

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?

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Q: What is the difference between the coupon rate and the current market interestrate of a bond?

A: It is the yearly interest rate rewarded to the bondholders. It stated as a percentage of face value.…

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: What effect do interest rates have on bond prices? What are the essential assumptions behind bond…

A: Introduction: Bonds are a kind of debt that the firm must repay. The term "coupon interest" refers…

Q: What exactly is a bond's "call" feature? What impact does the call feature have on bond premium or…

A: This question explains about a bond's "call" feature the call feature have on bond premium or…

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 relationship exists between bond prices and interest rates? Describe the circumstances behind…

A: Introduction : Bonds are debt instruments issued by governments and significant enterprises to raise…

Q: The interest rate stated on the bond is known as: (a) effective rate. (c) nominal rate. (b) market…

A: solution : The interest rate stated on the bond is known as: Correct answer is option c) nominal…

Q: What is a discount bond? A premium bond?

A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…

Q: With respect to bonds, when interest rates increase typically...

A: Bonds are inversely related to the interest rate. Since bond price is calculated based on interest.…

Q: Distinguish between the following interest rates for bonds payable:(a) Yield rate. (d) Market…

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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: link between the price of bonds and the rate of interest?

A: There is a inverse relationship between price of bonds and rate of interest.  If interest rate…

Q: What is the relationship between bond prices and interest rates?  Verbally describe how this…

A: Bonds are long-term debt instruments which are issued by government and large corporate houses for…

Q: What happens when a bond's market rate is less than the stated rate?

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Q: Explain the main premiums usually associated with bonds. How do such premiums affect bond prices?…

A: Since you have posted a question with more than three sub-parts, we will solve the first three…

Q: Why does the required rate of return for a particular bond change over time?

A: Bond is fixed rate long term debt instrument used by a business entities to raise funds from general…

Q: What variables influence the bond market's interest rates

A: This question explains about a variety of factors influences interest rates in the bond market.

Q: Discuss how does the length of time until maturity for a bond influence the relationship between…

A: Following are some relationships between the bond prices, interest rates, and bonds time to…

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: The effective interest technique is used to charge a discount on a bond that is due to be paid to…

A: The most effective approach to generating interest is... To amortize a bond over some time, the…

Q: Two interest rates are associated with pricing a bond.  Name and describe each.  How are they used ?

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

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: If bonds issue at a discount, is the stated interest rate less than, equal to, or more than the…

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

Q: A bond that has only one payment, which occurs at maturity, defines which one of these types of…

A: One payment which occurs at maturity means only principle amount of bonds are refunded and no coupon…

Q: What is the difference between callable and putable bonds?

A: Bonds are debt instruments issued by a company that borrows from its lenders. They are issued at a…

Q: What is the market rate of interest for a bond issue that sells for more than its face value?…

A: Bonds are instruments that are issued by an entity for the purpose of financing. It is a liability…

Q: Why does a bond’s par or face value differ from its market value? Cite your references

A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…

Q: Are bonds considered as fixed income securities?

A: Bonds are a type of loan taken by the borrower that promises to pay a certain sum as an interest to…

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: In the case of a bond, what is the difference between its coupon rate and the current market…

A: This question explains about the case of a bond,  coupon rate and the current market interest rate

Q: The rate of interest actually earned by bondholders is called the Select one: O a. effective rate. O…

A: Solution Concept If the coupon rate of bond is greater than the market rate of interest , bond is…

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…

Q: What are two important characteristics that determine the issuance price of a bond?

A: Following are the two characteristics that determine the issuance price of a bond: The riskiness of…