The yield to maturity on a bond with a price equal to its par value will Select one: a. Will depend upon the required return. b. Will be lower than the coupon rate. c. Always be equal to the coupon rate. d. Will be more than the coupon rate
Q: Which one of the following statements is true?
A: Bond: A bond represents a debt instrument issued to a debt holder by the company. The debt holder…
Q: d. As interest rate increases the value of a bond will ______________. e. If the bondholder’s…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: If the yield of maturity of the bond is equal the coupon rate, the price of this bond will be? a.…
A: Bond value is the current worth of a bond on the basis of the present value of all the cash flows a…
Q: Why s the realized compound yield to maturity and yield to maturity of zero coupon bond always the…
A: Zero-Coupon or Deep-Discount Bonds are issued at price lower than their face value and no periodic…
Q: Which of the following statements is the most accurate? 49. a. A bond's discount to maturity is…
A: Please find the answer to the above question below:
Q: A bond will sell at ____________ if the required return is greater than the coupon rate. Select…
A: Required return relation with price and coupon rate If required return is greater than coupon rate…
Q: 2. For each of the following situation, identify whether a bond would be considered a premium bond,…
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: The dollar interest received divided by the market price of the bond is called the Group of answer…
A: current yield formula: current yield =dividendmarket price
Q: A "discount bond" has a price less than face value because ________________. A) the issuing firm…
A: Discount Bond - Discount bond is something which is issued below its Par value, but it does not mean…
Q: If the current interest rate exceeds the bond’s coupon rate, the bond will sell at a___________.
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Find the current yield (as a %) of a bond whose coupon rate is listed as 4.875 and currently selling…
A: The coupon rate is the return that the investor gets for holding the bond for a certain amount of…
Q: The yield to maturity on a bond is A. below the coupon rate when the bond sells at a discount and…
A: Yield to Maturity : It is the expected rate of return that an investor in the bond may earn on his…
Q: For an investor who plans to purchase a bond that matures in one year, the primary concern should be…
A: The investor held the bond for 1 year so we should check the factors and will decide which factor is…
Q: A bond will be priced at a discount to par value if its coupon rate is less than its…
A: Bond prices have an inverse relationship with interest rates, with the price of the current bond…
Q: ind the current yield (as a %) of a bond whose coupon rate is listed as 6.375 and currently selling…
A: given, Coupon rate = 6.375% price = 106.375 let par = 100
Q: All else being constant, a bond will sell at __________ when the coupon rate is __________ the yield…
A: Bonds refer to investment securities in which money is to be lent to the company by an investor…
Q: The following statements describe the general characteristics of price of the coupon bond. Which one…
A: The price of bond = sum of the present value of coupons + present value of face value when the…
Q: Which of the following is correct? a. The YTM of a bond is its IRR b. Call premium rises as a bond…
A: YTM of bond is the rate of return that the bondholder will get if they hold bond till maturity and…
Q: All else constant, a bond will sell at when the coupon rate is maturity. Group of answer choices a…
A: Bond is referred to as an instrument of the indebtedness regarding an issuer of their bond to their…
Q: The rate of return earned on a bond if it is held until maturity is its: Group of answ
A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…
Q: Which of the following is correct? Group of answer choices 1. The lower the price you pay for a…
A: An overpriced bond is one whose price is more than its value. Therefore, 2nd option is incorrect.…
Q: The formula (Coupon Payment / Current bond price) calculates the _______. Multiple Choice
A: Following are the definitions: Current Yield = It is the annualized income (either in interest or…
Q: Which one of the following is most likely fixed for the life of a given bond? O Current price Coupon…
A:
Q: If the bondholder’s required rate of return equals the coupon interest rate, the bond will sell at…
A: Bonds are instrument issued by company acknowledging the debt raised by company . It is a liability…
Q: f a bond’s coupon rate is greater than the investor’s required rate of return on the bond, would the…
A: Prices of bond depend on required rate of return on the bond and the prices of bond changes with…
Q: he yield that a bond will earn given that it is bought back by the issuer at the earliest possible…
A: A callable bond is that bond which can be redeemed by the issuer of the bonds before it reaches its…
Q: An option free bond’s value/price has an inverse relationship with interest rates/yield. If yields…
A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…
Q: Explain whether the following statements are true or false. Justify your answer and solve all the…
A: The bond refers to the debt security issued by the companies to raise the funds at low rates. The…
Q: The yield on a zero-coupon bond of maturity Tis equal to: the return on the bond each period, if the…
A: Yield to Maturity of Zero-Coupon Bond is calculated using the price of Zero Coupon Bond and face…
Q: For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to…
A: Discount bond is a bond that is issued for less than its par value or face value. Discount bonds…
Q: suming that the market and coupon rates remain constant till maturity; a.the bond's price will…
A: Prices of bond mainly depends the required rate or interest rate in the market and less depends on…
Q: You predict that interest rates are about to fall. Which bond will give you the highest capital…
A: Capital gain which means excess of or difference of market price of Bond over the initial value or…
Q: All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity.…
A: Bond Coupon rate and YTM rate determines whether it will sell at discount, premium or at par.
Q: Bond Relationships. Select one or more of the following phrases to complete the following sentences.…
A: Bond is a contract under which a borrower promises to pay interest and principal on a specific dates…
Q: Which of the following statements is/are most CORRECT? O 1) A yield curve depicts the relationship…
A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…
Q: Check all that are true with respect to the yield to maturity (YTM) and the expected return for a…
A: Yeild to maturity is calculated by considering amount predetermined fixed future payments. It is…
Q: Consider a 1-factor parallel yield shift model with a flat structure of interest rates and consider…
A: Duration of bond is the rate of change in price of bond with change in interest rate in the market.…
Q: One of the above is the most accurate statement? a. A bond is trading at a premium if its yield to…
A: Please find the answer to the above question below:
Q: For an investor who plans to purchase a bond that matures in one year, the primary concern should be…
A: Bonds are source of investment, where the investor gets the fixed coupon payment through out the…
Q: Yield to maturity The relationship between a bond's yield to maturity and coupon interest rate…
A: Yield to maturity is return on the bond if held till maturity
Q: Coupon payments are fixed, but the percentage return that investors receive varies based on market…
A: Given: Coupon rate 9% Number of years to maturity 18 Years Par value 1000 Current…
Q: Risk free rate can be derived from a triple A rated commercial bonds and the estimated price of…
A: The risk-free rate is an interest rate that an investor expects for the investment in the risk-free…
Q: If the bondholder's required rate of return equals the coupon interest rate, the bond will sell at…
A: Introduction: Bonds: When company require funds then they go by issuing bonds. Bonds pay interest…
Q: A bond has a market price that exceeds its face value. Which one of these features currently applies…
A: The price of the bond is dependent upon the face value, coupon rate, yield to maturity and duration…
Q: Current yield is used to determine Seleccione una: a. A portion of the yield on an investment b. The…
A: Bonds are debt securities containing interest payments. Bonds could be issued and redeemed at par…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- For the yield-to-maturity (YTM) to qual the actual compound return an investor realizes on an investment in a coupon bond, we must assume: O A. cash flows will be paid as promised. B. The bond will be held until maturity. C. cash flows will be reinvested at the YTM rate. D. All of the above.If the yield of maturity of the bond is equal the coupon rate, the price of this bond will be? a. Lower than the par value. b. Equal the par value. c. Higher than the par value.For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to maturity. Select one: O a. less than; less than O b. equal to; equal to O c less than; greater than O d. greater than; greater than O e. greater than; less than
- The yield to maturity on a bond a is fixed in the indenture. b is lower for higher-risk bonds. c is the required return on the bond. d is generally equal to the coupon interest rate.A bond will sell at ____________ if the required return is greater than the coupon rate. Select one: a. A discount b. Liquidation value c. Par d. A premiumAll else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. A. a discount; less than B. a discount; higher than C. a premium; equal to D. a premium; less than
- The yield on a zero-coupon bond of maturity Tis equal to: the return on the bond each period, if the bond is held until maturity the expected return on the zero-coupon bond the forward rate for time T-1 the forward rate for time T the spot rate of interesthe yield that a bond will earn given that it is bought back by the issuer at the earliest possible date is the: Select one: a. current yield b. yield to maturity c. yield to put d. market yield e. yield to callWhat 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
- Assuming that the market and coupon rates remain constant till maturity; a.the bond's price will remain constant over time b.No option is correct c.the bond price will approach its market value over time d.the bond's price will approach its face value over timeAll else being constant, a bond will sell at __________ when the coupon rate is __________ the yield to maturity. Select one: a. a premium; equal to b. a premium; less than c. par; higher than d. a discount; less than Clear my choiceAll else equal, a bond would be sold at __________ if its coupon rate is _________ its yield to maturity. a. premium, lower than b. par, equal to c. discount, greater than d. discount, equal to