A bond is a financial asset where the issuer O is obliged to pay a bond holder interest at specified intervals (the coupon) and/or to repay the principal at a specified future date (the maturity date). O pays a rate of return (interest) that fluctuates with market conditions. O receives regular payments from the bond holder determined at a market rate at the time of payment. O pays a higher rate of return (yield) as the price of the bond rises.

A bond that is bought at a price below its face value and the face value is repaid at a maturity date is called a:   Select one: a. simple loan b. fixed-payment loan. c. Coupon bond. d. Discount bond

If the current price of a bond is greater than its face value: A) There is no right answer. B) the yield to maturity must be larger than the current yield. C) the coupon rate must be equal to the current yield.

Indicate which one of following statements is true for a coupon bond: A) When the price of a bond is above its par value, the yield to maturity is greater than the coupon rate. B) The yield to maturity and the price of a coupon bond are positively related. C) When the price of a coupon bond equals its face value, the yield to maturity equals the coupon rate. D) When the price of a bond is below its par value, the yield to maturity is less than the coupon rate Support your answer with the use of a formula and explain in detail all the assumptions you make and all the components you use. (You may also want to use a yield calculator to verify you answer).

Question 6 Suppose you are interested in buying a one-year 1,000 dirham bond. You have two options available in the bond market: Option 1 - Emirates Airline bond that pays a coupon rate of 4.75% per year paid annually. Option 2 - Emaar bond that pays a coupon rate of 6.0% per year paid annually. If you decide to buy the Emirates Airline bond, which of the prices below will give you a return approximately equal to the Emaar bond? O a. 956.9 dirhams Ob.973.2 dirhams O. 995.2 dirhams Od. 988.2 dirhams

Compounding: the accumulation of a sum of money when the interest earned on the sum earns additional interest. Because of compounding, small differences in interest rates lead to big differences over time. Assume that instead of spending $30,000 on your wedding, you only spend $5,000. You use the remaining $25,000 to buy stocks/bonds and you hold them for 40 years. Calculate the Future Value on $25,000: If your portfolio's rate of return is 8% (i = 0.08), Future Value = If your portfolio's rate of return is 6% (i = 0.06), Future Value = In a 200-word paragraph, please summarize the results of your calculations and list three things that you learned from this exercise.

A bond with a face value of $1,000 has 8 years until maturity, has a coupon rate of 8%, and sells for $1,100. What is the yield to maturity if interest is paid once a year? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.   What is the yield to maturity if interest is paid semiannually? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.

bond valuation An investor has two nonds in her portfolio, bond C and bond Z. each bond maturres in 4 years has a face value of 1000, and has a yield to maturity of 9.6% bond C pays a 10% annual coupon, while bond Z is a zeo coupon bond . b- assuming that the yield to maturity of each bond remains at9.6% over the next 4 years, calculate the price of the bonds at each of the following years to maturity year 4,3,2,1,0 b- plot the time path of price for each bond

Economics Annual premiums are paid into a 3 year unit linked endowment policy where 98% of each premium is allocated to units in a fund that carries a 3% bid- offer spread and charges management fees of 0.75% of assets at the end of each policy year. The policy has a death benefit of the bid value of units payable at the end of the year of death subject to a minimum of £12,500. The survival benefit is the bid value of units at the end of the term. The life assurance company estimates that expenses are £95 per policy per year. (a) Produce projected revenue accounts for each year of a policy with an annual premium of £5,000 assuming the annual rate of mortality is 0.00498, an investment return of 6.9% per annum and an interest rate on cash balances of 3% per annum. (b) Does the life assurance company meet its internal profit margin objective of 5% on this policy if its risk discount rate is 5.5% per annum?

You are purchasing a 20-year, zero-coupon bond. The yield to maturity is 9.76 percent and the face value is $1,000. What is the current market price? Assume a semiannual interest rate payment.