What is the difference between face rate and market rate, and which rate would be higher if a bond is issued at a discount?

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: 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 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: What factors affect the market rates for bonds?

A: In general, the supply of and demand for bonds affect market rates. The market rate for particular…

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: 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: How do you calculate the price of bonds if you have the par value, contract rate, and market rate

A: This question teals about If you know the par value, contract rate, and market rate of bonds, you…

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: 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: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: What is the stated rate for a bond?

A:

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: if the market rate of interest is lower than the stated rate, bonds will sell at an amount ?

A: Solution: if the market rate of interest is lower than the stated rate, then bond will sell at an…

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 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: What impact do interest rates have on bond prices? What are the fundamental assumptions that go into…

A: SOLUTION-   A BOND IS LOAN FROM AN INVESTOR TO A BORROWER SUCH AS A COMPANY OR GOVERNMENT .THE…

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: 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: Which of the maturity lengths between the bonds, bills, and notes would be most advantageous during…

A: Bear market is the market condition when it drops off 20% or more than market average. It occurs…

Q: Why is the yield of bonds with credit risk higher than that of otherwise identical default-free…

A: The question is based on the concept of calculation of yield to maturity in bond investment , the…

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 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: How does collateral affect the interest rate on a bond? How does subordination affect the interest…

A: The interest rate on a bond is affected by many factors like collateral, subordination, etc.

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

A:

Q: What is the relationship between bond price and interest rate? Describe in fully how this…

A: Bonds are referred to as those investment securities which are issued by companies as units of…

Q: Why does the required rate of return for a particular bond change over time?

A: Bond is fixed rate long term debt instrument used by a business entities to raise funds from general…

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 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 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 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: The yield spread between two bond issues reflect more than just credit risk.  What other factors…

A: Bond refers to the securities in which an investor lends money to the government in exchange for…

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…

Q: Which of the following is TRUE concerning the distinction between interest rates and returns? Select…

A: The Rate of return refers to a rate at which return is generated which is based on the initial…