Consider a bond with a 4% annual coupon and a face value of $1000. Complete the following table. Years to Maturity Yield to Maturity Current Price 2 3% 2 4% 3 4% 5 3% 5 7% (Round to two decimal places as needed.) ased on the table, what relationships do you observe between years to maturity, yield to maturity, and the current price? (Select all that apply.) A. Price and years to maturity are negatively related (for any given yield to maturity). B. Price and yield to maturity are negatively related (for any given years to maturity). C. Price and yield to maturity are positively related (for any given years to maturity). D. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value. E. Price and years to maturity are positively related (for any given yield to maturity). F. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value divided by the number of years to maturity. G. When yield to maturity is less than the annual coupon rate, price and years to maturity are negatively related. H. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value times the number of years to maturity. I. When yield to maturity is less than the annual coupon rate, price and years to maturity are positively related.
Consider a bond with a 4% annual coupon and a face value of $1000. Complete the following table. Years to Maturity Yield to Maturity Current Price 2 3% 2 4% 3 4% 5 3% 5 7% (Round to two decimal places as needed.) ased on the table, what relationships do you observe between years to maturity, yield to maturity, and the current price? (Select all that apply.) A. Price and years to maturity are negatively related (for any given yield to maturity). B. Price and yield to maturity are negatively related (for any given years to maturity). C. Price and yield to maturity are positively related (for any given years to maturity). D. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value. E. Price and years to maturity are positively related (for any given yield to maturity). F. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value divided by the number of years to maturity. G. When yield to maturity is less than the annual coupon rate, price and years to maturity are negatively related. H. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value times the number of years to maturity. I. When yield to maturity is less than the annual coupon rate, price and years to maturity are positively related.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Consider a bond with a 4% annual coupon and a face value of $1000. Complete the following table.
Years to Maturity
Yield to Maturity
Current Price
2
3%
$
2
4%
$
3
4%
$
5
3%
$
5
7%
(Round to two decimal places as needed.)
Based on the table, what relationships do you observe between years to maturity, yield to maturity, and the current price? (Select all that apply.)
A. Price and years to maturity are negatively related (for any given yield to maturity).
B. Price and yield to maturity are negatively related (for any given years to maturity).
C. Price and yield to maturity are positively related (for any given years to maturity).
D. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value.
E.
Price and years to maturity are positively related (for any given yield to maturity).
F. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value divided by the number of years to maturity.
G. When yield to maturity is less than the annual coupon rate, price and years to maturity are negatively related.
H. Whenever yield to maturity equals the annual coupon rate, the bond's price is equal to its face value times the number of years to maturity.
01. When yield to maturity is less than the annual coupon rate, price and years to maturity are positively related.
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