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

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

A: The cost of bonds issued is attractive. Interest is paid at predetermined intervals. Bondholders are…

Q: What does a bond’s coupon rate refer to? Investment grade bonds have what range of S&P credit…

A: Bond's coupon rate refers to interest paid to the issuers on the bond's face value.

Q: what does the bond rating depend on?

A: It is a credit rating which represents the creditworthiness of both the corporate and the government…

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: 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: hen interest rates.................., the market required rates of return....................., and…

A: Step 1 A fundamental principle of bond investing is that market interest rates and bond prices…

Q: What are Bond prices and interest rates? And what is the relationship between them?

A: Bond is a debt instrument which provides regular periodic interest income to an investor. Generally,…

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: Why do bond prices and bond yields move inversely?

A: A bond is referred to as a fixed-income instrument since it pays debt holders a fixed interest rate…

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: Is Treasury Bond Yield, the risk free rate?   Yes or No. Explain.

A: Introduction: Risk free rate is nothing but an investment’s return rate with no chance of loss. The…

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: 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: 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 do bond ratings affect the default risk premium?

A: A premium which is paid by the borrower to its lender in the form of compensation of lender’s money…

Q: what is the yield in percent, on the bond held to maturity?

A: Market Price of bond = $970  Future Value of bond after one year = $1,000   Formula:Current Value of…

Q: What is the difference between the yield to maturity of a bond and the realized yield?

A: Introduction: Depending upon the market conditions, yield at maturity is the market return expected…

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 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: 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 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: ences the bond market's interest rates

A: Step 1 Borrowing profits are strongly influenced by monetary policy—in particular, the interest rate…

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: How does a bond’s current yield differ from its total return?

A: A bond is a debt financial instrument issued by governments or corporations to raise capital from…

Q: Explain the relationship between the price of a bond, coupon rate, yield and time.

A:

Q: How is a bond’s duration impacted by varying the coupon rate? How is a bond’s duration impacted by…

A: 1. Bond duration and coupon rate have inverse relation that means if coupon rate increase then the…

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: What is a bond rating, and how do ratings affectbonds’ prices and yields?

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

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: 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 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 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…