H3. Please explain with details both questions and also explain wrong options Question 3 A bond is a premium bond. B bond is a disount bond. Both bonds have a yield to maturity of 6%. Which bond should have the higher holding period return over the next year? A B they should have the same holding period return. not enough information to determine Question 4 Bond A is a discount bond. Bond B is a premium bond. If yields remain constant, which bond's price should rise as it matures? A B prices of both A and B should rise as it matures not enough information to determine

Question 4 Assuming a bond is issued at a discount, which of the following would definitely not change over the life of the bond? A The yield to maturity of the bond B The price of the bond C The coupon rate of the bond D The current yield of the bond

Please help me sir correct step by step ill rate the solution.

Question 2 a. A bond that matures in one year has a $500 face value and a $60 coupon. What is the price of the bond if the interest rate is 6 percent and the bond was purchased by the present owner for $450? b. A bond that matures in two years has a face value equal to F and a coupon equal to R. Suppose that the yield to maturity, i, is such that i = ( R / F ). The price of the bond equals... F F/(1+i) F(1+i) F/i Answer both otherwise don't do that I will Dounvote

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Which of the following bonds will have the larger price change (dollar value) for a 75- basis point change in yield? A. A $120 dollar bond with duration 2.25 B. A $70 dollar bond with duration 3.25 C. A $160 dollar bond with duration 1.75 D. A $200 dollar bond with duration 1.25 E. A $300 dollar bond with duration 0.75

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A zero-coupon bond refers to a bond which: Answer a. Does not pay any coupon payments because the issuer is in default b. Promises a single future payment c. Pays coupons only once a year d. Pays coupons only if the bond price is above face value

The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 8% per year for each of the next five years and 7% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t-1) %, where t is the security's maturity. The liquidity premium (LP) on all Moq Computer Corp.'s bonds is 1.05%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Rating U.S. Treasury AAA AA A BBB O 11.93% O 12.98% O 12.28% Default Risk Premium Moq Computer Corp. issues eight-year, AA-rated bonds. What is the yield on one of these bonds? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. O 5.35% 0.60% 0.80% 1.05% 1.45% Based on your understanding of the determinants of interest rates, if everything else remains the same, which of the following will be true? OA BBB-rated bond has a lower default risk premium as compared to an AAA-rated bond.