he rate of interest actually earned by bondholders is called the a. stated rate. b. coupon rate. c. bond rate. d. effective rate.

If the carrying amount of bonds redeemed is more than the redemption price, the difference is recorded as a a. discount. b. premium. c. gain. loss. O d.

Write down an equation for the three main components of the nominal long term interest rate on a bond, clearly explaining what each symbol stands for.

23. The bond issue price is determined by calculating the a.future value of the stream of interest payments and the future value of the maturity amount. b.present value of the stream of interest payments and the present value of the maturity amount. c.future value of the stream of interest payments and the present value of the maturity amount. d.present value of the stream of interest payments and the future value of the maturity amount.

1. To calculate a gain or loss on redemption of a bond, you compare a. The market interest rate to the contract rate b. The carrying value value of the bond to the proceeds received from the sale of the bond c. The income for the period d. The proceeds to the unamortized premium or discount   2. If the proceeds are greater than the carrying value, you will have a a. gain with a credit balance b. gain with a debit balance c. loss with a debit balance d. loss with a credit balance

What is the total rate of return on the bond?

All of the following refer to the face rate of interest on a bond except: a. stated rate b. effective rate c. nominal rate d. coupon rate

Two interest rates are associated with pricing a bond.  Name and describe each.  How are they used ?

Question 47: Match each financial function to its best description. PMT PV Table FV       Calculates the value of a bond at a later date Calculates the required payment for a bond Calculates the current value of a bond

1. What is the relationship between interest rate level and bond price? Why must this relationship be true? How has the current rate environment impacted the prices of bonds?