f a bond’s coupon rate is greater than the investor’s required rate of return on the bond, would the bond’s price be greater than or less than its par valu
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If a bond’s coupon rate is greater than the investor’s required
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- Does it make any difference if the coupon rate on a bond is more than the needed rate of return on the bond, as long as the required rate of return is greater than the coupon rate? Explain.What is the difference between a bond's coupon rate and its required return?Why does the yield on a discount bond surpass the coupon rate?
- What is the relationship between the price of a fixed coupon bond and the interest rate? Why does this relationship persist?What is the connection between the interest rate and the price of a fixed-coupon bond? Why is it that this connection continues to exist?What will be the price of a bond in which the YTM is higher than the coupon rate? a. Below face value b. At face value c. Above face value d. Cannot be determined
- Why does the yield of a bond that trades at a discount exceeds the bond’s coupon rate?Describe the differences between the yield to maturity (YTM) and the yield to call (YTC) on a bond. Why would the return to the investor be different if a bond is called? Justify your answerWhat is the difference between a bond's coupon rate and its current market interest rate?
- How is a bond’s duration impacted by varying the coupon rate? How is a bond’s duration impacted by varying the time to maturity? What implications would these impacts have for a bond investor if interest rates change?Explain the differences between a bond's yield to maturity (YTM) and its yield to call (YTC). Is there a reason why the return to the investor would alter if a bond is called? Please provide justification for your response.Describe in detail the key features of a bond (face value, maturity, coupon rate, coupon, yield to maturity, current yield). What are the cash flows associated with a bond? What is a discount bond? Premium bond? Par bond? How does the price of a bond vary in relationship to market rates?
