Under what conditions will a discount bond have anegative nominal interest rate? Is it possible for a coupon bond or a perpetuity to have a negative nominalinterest rate?

Q: What effect do you think this inflation adjusted rate has on the price of an I-bond in comparison…

A: I-Bonds also known as inflation link saving bonds are the bonds with minimal risk category…

Q: Why does the yield on a discount bond surpass the coupon rate

A: Introduction:The bond will trade at a discount if the yield to maturity (YTM) exceeds the coupon…

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: Why is the required rate of return on a bond different than the copoun rate

A: Bonds are the debt securities which are issued by the corporates or the government to raise the…

Q: Describe in detail the key features of a bon value, maturity, coupon rate, coupon, yield maturity,…

A: Bonds are debt instruments that carry the interest payments to be paid each period and face value on…

Q: What is the difference between face rate and market rate, and which rate would be higher if a bond…

A: There are many types of financial instruments issued to raise funds.

Q: if a coupon bond are selling at a discount then?

A: Solution: If a coupon bond are selling at a discount then it means market interest rate of similar…

Q: Why does the yield of a bond that trades at a discount exceeds the bond’s coupon rate?

A: Where yield to maturity(YTM) is exceed coupon rate payable on bond, the bond will trade at discount.…

Q: Which is the relationship between the price and the implicit rate of return of a bond?

A: When a company issues a bond, it asks the investor for a loan, i.e. you're lending the bond issuer…

Q: Why does the zero-coupon bond pay no interest?

A:

Q: when the bond price is above par or at a premium?

A: Coupon: Coupon is the annual or semiannual payment will be made by the issuer of the bond to its…

Q: For a bond issue that sells for less than its face value, the market rate of interest is a. Higher…

A: The correct answer is option (a)

Q: What is the connection between the interest rate and the price of a fixed-coupon bond? Why is it…

A: Interest rate is the rate that is prevailing in the market on which you can invest your money. Fixed…

Q: Is the risk-free rate the Treasury Bond Yield

A: Introduction: A risk-free rate is the rate of return on an investment with no risk of loss. The…

Q: All else equal, which bond's price is more affected by a change in interest rates, a short-term bond…

A: Solution:- We know, interest rate and the price of bond are inversely related. Duration means change…

Q: Why does the market value differ from its par value when the coupon interest rate does not equal the…

A: Par Value is the denominated value of bond which is used for coupon calculation whereas market price…

Q: An option free bond’s value/price has an inverse relationship with interest rates/yield. If yields…

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: True or False: Assuming all else is equal, the shorter a bond's maturity, the more its price will…

A: Explanation : In simple words, the short term bonds are have lower volatility risk as compared to…

Q: Explain the difference between the coupon rate and the required return on a bond.

A: Coupon rate :  Coupon rate is the rate that is paid periodically. The coupon rate is the amount of…

Q: What is the difference between a bond's coupon rate and its current market interest rate?

A: Bond's coupon rate is the cash interest rate that the bond is actually providing to the bond holders…

Q: Why do bond prices vary inversely with interest rates?

A: Interest rate is the amount charge by the lender for the use of an asset. It is charged on the…

Q: What happens to the price of a bond when interest rates change?

A: SOLUTION- DEFINITION OF BOND PRICE-  A Bond price is the present value of the following future cash…

Q: What are the circumstances in which one may buy a bond certificate at a price that is higher or…

A: Bonds are issued by a company to raise finance.

Q: which of the below does not qualify a bond ? a. Time to maturity b. Par Value c. Coupon rate d.…

A: Bonds are a sort of financial instrument used by governments and enterprises to raise funding from…

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

A:

Q: Does the interest rate on a T-bond include a default risk premium? Explain.

A: Treasury bonds (T – Bonds) are the bonds which are issued by the U.S. Federal Government in form of…

Q: What is the relationship between a bond's coupon rate and its current market interest rate

A: The annual interest rate paid to bondholders is known as the coupon rate. It's expressed in terms of…

Q: There is an inverse relationship between market interest rates and bond prices true false

A: Bonds indicate an instrument introduced by the corporation for raising funds from the market by…

Q: price of a long-term (longer-maturity) bond more or less sensitive to changes in interest rates than…

A: Long term bonds are more sensitive to change in interest rates than short term bond. If Interest…

Q: When it comes to bond values, what role do interest rates play? How can you value a bond if you…

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

Q: How does the price-yield relationship for a callable bond compare to the same relationship for an…

A: The price yield relationship for a callable bond is negative convexity and it is positive convexity…

Q: what happens to the bond prices when interest rate falls?

A: At the point when interest rates increase, the bond price downfall, and bond costs ascend as loan…

Q: What is the difference between the coupon rate and the current interest rate for a bond?

A: Coupon rate: It is the rate of interest being paid off for the fixed income security such as bonds.…

Q: Should the rate of return of a call option on a long-term Treasury bond be more or less sensitive to…

A: The financial contracts available which give the buyer the right to buy a stock or underlying asset…

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: If interest rates increase after a bond issue, the yield-to-maturity will ______

A: YTM is the rate of return at which Price of bond is equal to its PV of future cash inflows.

Q: If interest rates rise after a bond issue, what would happen to the bond's price and YTM? Does the…

A: Bond is the agreement between the company and investor regarding a fixed payment is provided to the…

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: Does interest rate risk matter or is it negligible? Why/why not? Will it be important for one who is…

A: Interest rate risk : In simple words, the risk of losing value in a bond investment or in loan taken…