What happens when the bond's market rate is greater than the stated rate?

Q: If interest rates in the financial markets increase after a bond is issued, what will happen to the…

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Q: What effect do interest rates have on bond prices? What are the underlying assumptions that go into…

A: Bond: Bond refers to debt security issued by the company from the debt investors to raise capital.…

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: 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: 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: 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: 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: Under what conditions will a discount bond have anegative nominal interest rate? Is it possible for…

A: A discount bond is a bond that is issued for less than its par—or face—value. Discount bonds may…

Q: How does bond duration and bond convexity complement each other in measuring a bond portfolio’s…

A: Interest rate risk-It is the risk that arises for the bondholders from a volatile interest rate term…

Q: How does the carrying value of a bond gets amortized when selling it at discount?

A: The carrying value of bond represents the amount of Bond Face Value + unamortized premium (or )–…

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: Does it make any difference if the coupon rate on a bond is more than the needed rate of return on…

A: Introduction: Bond prices are determined by the needed rate of return on the bond, and bond prices…

Q: In the bond market, provide a list of the variables that influence the equilibrium interest rate and…

A: Introduction: The price at which the quantity of cash requested is equal to the amount of money…

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: Discuss how the duration of a bond's maturity affects the link between market interest rates and the…

A: This question explains about the duration of a bond's maturity affects the link between market…

Q: What is the dollar price of the bond?

A: Bond valuation is the process of determining the fair price of the bond. The fair price determines…

Q: Explain why are the bond prices for A and B different or the same? Explain your answer clearly.

A: Price of a bond is the sum of the present value of all the coupon bonds made and the face value at…

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 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 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: 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: What is the relationship between the price of a fixed coupon bond and the interest rate? Why does…

A: Bonds are issued by the company to meet the financial requirements of the company without losing its…

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

A:

Q: What is the total rate of return on the bond?

A: Bonds are issued by various entities like corporates, municipal corporations, and governments of the…

Q: What is the relationship between the PV and the market interest rate?  Does a lower market rate…

A: PV of a bond is computed using the concept of time value of money. Here the cash flows of a bond are…

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: What is the price of floating rate bond that is at its reset date?

A: Floating rate Bond : It is the bond where there is  variable coupon payment to  investor. Interest…

Q: If the stated interest rate exceeds the market interest rate, a bond will sell at a premium. True or…

A: Bonds are the financial instruments, which are issued so as to raise debt with a fixed interest…

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: 1. What is the relationship between interest rate level and bond price? Why must this relationship…

A: 1. The interest rate and bond have an inverse relationship .when interest rate rise , the bond price…

Q: the current interest rate exceeds the bond’s coupon rate, the bond will sell at a ___________.

A: A Bond can generally sell at par, discount or premium

Q: What is the difference between a bond's coupon rate and its required return

A: A financial instrument is a bond. The issuer issues a bond to raise funds and repay the money at the…

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: Explain why an increase in the inflation rate will cause the yield to maturity on a bond to increase

A: Bond yield to maturity is the interest an investor earns by holding the bond till maturity.…

Q: what do the bonds yield at the following prices?

A: The Yield To Maturity (YTM) is one one the method used to find out the price of bond. It gives the…

Q: /hat is the issue price of the bond? (FV ples provided.)

A: Issue Price of the Bonds = Present Value of the Face Value of the Redemption + Present Value of the…

Q: explain how fluctuating market interest rates impact the price of a bond being sold on the secondary…

A: Bonds represent the liability for the company that is posted under the head non current liabilities…