What are the key features of a bond?

Q: Which of the following would describe a callable bond?

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

Q: What is investment-grade bond?

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: What is the purpose of a bond?

A: A bond is a debt instrument issued by governments and corporations to raise long-term funds. A bond…

Q: Why consider bonds?

A: A bond can be described as the security or asset which provides secure income to the investor…

Q: Describe a bond and its characteristics.

A: Bond is a long-term debt instrument. A bond may be secured or unsecured. Bonds are issued by…

Q: How do I determine the duration of a bond

A: It is an object used in bond valuation to determine the sensitivity of the bond. High duration comes…

Q: Define bond spread

A: Answer: The term ‘bond spreads’ or ‘spreads’ refers to the difference in the interest rate between…

Q: What is a bond indenture?

A: Bonds: Bonds are debts instruments issued by corporates. Bonds are issued at par, premium and…

Q: What is a bond spread?

A: Answer: The term ‘bond spreads’ or yield spread is the disparity in yield between debt instruments…

Q: What are debenture bonds used for?

A: Debenture bonds: Debenture is a debt instrument which are issued to raise the capital. The debenture…

Q: In what sense is a project’s IRR similar to the YTM on a bond?

A: IRR is the discount rate that forces an NPV of project equivalent to zero. Estimation of rate of…

Q: What purpose does the variety in bond features (types and characteristics

A: A bond is referred to as a fixed income instrument since bonds traditionally paid a fixed interest…

Q: What are callable and puttable bonds? Explain in single sentence please.

A: Callable bonds are the bonds which can be redeemed anytime at the option of the issuer before its…

Q: What is on-the-run bond ?

A: The question is based on the concept of liquidity and issue of bond, the on-the-run bond are…

Q: What is bond duration? What is bond convexity? What is the difference between the two concepts?

A: Duration refers to the exposure to interest rate adjustment in the value of a bond or many other…

Q: What are the four main types of bonds?

A: The four main types of bonds are discussed as follows: Fixed-Rate bonds – In this type of bond, the…

Q: What is a serial bond?

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

Q: What is a term bond?

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

Q: What is a bond indenture? What provisions are usually included in it?

A: Bond indenture: Its a written legal document.

Q: What is a debenture bond?

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

Q: What is premium bond?

A: Bonds are one of the securities issued for raising finance from debenture holders. Normally bonds…

Q: What is return formula for bond?

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

Q: What is meant by Junk bond?

A: Companies can raise funds either through raising capital or obtaining loan. Bonds are instruments…

Q: What are the different types of Bonds?

A: A corporate bond is a type of debt security that is issued by a firm and sold to investors. The…

Q: What is a bond indenture? How does a superior bond differ from a subordinate bond?

A: Bonds are the financial debt instrument that are issued for raising funds at fixed interest rate for…

Q: What information is contained in a bond indenture? What purpose does it serve?

A:

Q: What is a clean and dirty price of a bond?

A: SOLUTION:- The clean price of a bond refers to the price which does not includes accrued interest.…

Q: What is a sinking fund bond?

A:

Q: Summarize some specific bond terms?

A: A bond is nothing but a financial instrument that a company issues for raising capital. It is…

Q: What is income bond?

A: A financial instrument with a fixed cost that helps a company to raise funds for business operations…

Q: Explain the meaning of duration of a bond. Critically discuss the duration rules of bonds

A: Meaning: Duration is the measure of the price change with respect to change in the interest rate. In…

Q: Describe the types of bonds.

A: A bond is a debt instruments used to raise funds in order to finance different projects or for…

Q: What is a securitized Bond?

A: When the outstanding bonds are pooled together to form a new category of product and then is traded…

Q: What is a bond indenture? What does it contain?

A:

Q: What is international bond?

A: International bonds are usually corporate bonds. As the name implies, these bonds are subject to…

Q: Briefly explain types of serial bonds.

A: Bond is a debt security which carries a fixed interest rate. The fixed interest rate is known as…

Q: How do you compute Macaulay's duration on a bond?

A: FORMULA TO CALCULATE Macaulay's duration on a bond DMacaulay's=∑T=1NC×T1+rT+M×N1+rNpricewhere,C =…

Q: Which bond risk components interact to make immunization successful? Explain how these bond risk…

A: Bond’s duration is adjusted to match its investment horizon. Bond’s duration is the average life of…

Q: How is the IRR on a project related to the YTMon a bond?

A: The Internal Rate of return is the rate of return on a project at which its net present value is…

Q: which bond would be prefer?

A: Rational investor would prefer investment in which it would receive highest yield. The interest…

Q: What is the purpose of bond indenture?

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

Q: What is junk bond?

A: junk bonds have lower credit rating than other bonds therefore provides high interest rate to…

Q: Explain the key different between a bond and an ordinary share

A: Bond: A bond represents the issuance of the debt by the company and repaying it at a certain point…

Q: What purpose does the variety in bond features (typesand characteristics) serve?

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

Characteristics of Bonds