What are the two bond amortization methods mentioned in the book and how are they different?

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 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: What is the relationship between bond prices and interest rates? Describe the process of…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

Q: How are bonds amortized?

A: Bond Amortization: Over the course of the bond's existence, the principal (face value) of the loan…

Q: There are two risks involved in the bond investment. What are they and why are they risks?

A: Bonds are called fixed-income investments as they pay a fixed rate of interest to debtholders. They…

Q: What are the key features of a bond?

A: A bond is a fixed income instrument. The bond holders are referred to as the debt holders or…

Q: What effect does collateral have on a bond's interest rate? What effect does subordination have on a…

A: There are various factors that impact a bond's price. We discount back the future cash flows of a…

Q: What is a bond indenture?

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

Q: Define the  Bond Indenture.

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

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 is the relationship between bond prices and interest rates?

A: There is a inverse relation between bond prices and interest rates.  As interest rates increases,…

Q: If you are planning on doing a Substit swap on the following two bonds, wh transaction should vou…

A: Introduction : In simple words, swap refers to the contract in which an investor exchange one deal…

Q: what is the difference between bonds payable and accounts payable? explain your answer?

A: Bond payable and account payable both are liabilities of the company , which is to be paid in future…

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 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: Compare and contrast two different types of bonds explaining their advantages and disadvantag

A: Bonds can be referred to as investment security issued by a large private organization or by the…

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

A: Bond indenture: Its a written legal document.

Q: Why is the time Submittal bonds important?

A: A bid bond is a building bond form that covers the holder or developer during a contract. It is a…

Q: Define bond amortization.

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

Q: what is difference between a bond and a term loan? what are the advantages of a term loan over a…

A: A bond is a fixed-income security that speaks to credit to a borrower (normally corporate or…

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: How are bonds and notes the same? How do they differ?

A:

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

A:

Q: Which of the following statements is not correct? Select one: а. The duration of a consol bond is…

A: a) Duration of the Consol Bond /Perpetuity has no maturity =1+yy years where ,y= Coupon rate of the…

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: What is the straight-line amortization approach with regards to a bond discount or premium?

A: Bond with a straight-line amortization schedule: The straight-line amortization technique is a way…

Q: Two bonds, bond A and bond B, are identical except that bond A is convertible and bond B is not.…

A: A convertible bond has an option to convert into equity shares of the company, built into the bond.…

Q: In regard to a bond discount or premium, what is the straight-line amortization method?

A: Straight-line amortization bondStraight line method of amortization is a process of amortizing…

Q: What are the two ways that discount and premium on bonds due are amortized? Each one should be…

A: Solution Two ways that discount and premiums on bond are amortized are as flows Straight line method…

Q: Which costs are included in bond issuance costs? How are they recorded?

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

Q: What are the possible reasons for bond issuers to make use of the call feature?

A: Callable Bonds refers to bonds issued with a right held by issuer to redeem that bonds at defined…

Q: How do we compute for the Carrying Value beginning of a Bonds Payable? of a Notes Payable? Are there…

A: The carrying value (or "book value") of the bond at a given point in time is its face value minus…

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

A:

Q: What is bond valuation? Give a detail explantion.

A: Answer

Q: What relationship exists between bond prices and interest rates? Explain how you came to make this…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

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: 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: 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: What is the purpose of bond indenture?

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

Q: Why is the maturity of some bonds ambiguous?

A: A bond is a debt security, Borrowers issue bonds to raise money from investors willing to lend them…

Q: What is the difference between a mortgage bond and a convertible bond?

A: Mortgage bond: A mortgage bond (also known as a secured bond) is a corporate bond that is secured by…

Q: Explain the difference between subordinated debenture versus senior debt and also explain which one…

A: A debt is a sum of money lent by another group.

Q: What is the accurate time for the submittal of the bond?

A: There are different instruments in which the investor can do investment. These instruments can be a…