How the zero coupon bond provide returns to investors

Q: What is the connection between the interest rate and the price of a fixed coupon bond? Why is this…

A: The cost of bonds issued is attractive. Interest is paid at predetermined intervals. Bondholders are…

Q: how the zero-coupon rate bond provides return to the investor and gives the advantages to the…

A: A zero coupon bond is a fixed income security which is sold at a deep discount to its face value.…

Q: What is the cost of equity based on the own-bondyield-plus-judgmental-risk-premium method?

A: Answer: Bond-yield-plus-judgemental-risk-premium method involves adding a judgemental risk premium…

Q: What is the expected return of the corporate bond​ investment?

A: Expected return of the corporate bond investment is calculated using following equation Expected…

Q: Is a greater yield to maturity or a lower yield to maturity better to bondholders? Why?

A: When the yield to maturity rises, the bond's price decreases. If the bondholder sold it at that…

Q: Discuss how prospect theory explains the equity premium puzzle?

A: The equity premium puzzle means outperformance of stocks over Treasury bills,  which is based on…

Q: Saved The higher a bond's coupon, the lower the bond's price volatility. M... True or False ga los…

A: True The higher a Bond's coupon decrease the or lower the Bond's price volatility and also lower the…

Q: if a coupon bond are selling at a discount then?

A: Solution: If a coupon bond are selling at a discount then it means market interest rate of similar…

Q: When it comes to bonds, why is yield to maturity more essential than coupon rate?

A: Yield to Maturity, or YTM, is a discount rate that provides discounted future coupons and redemption…

Q: c. Which yield might investors expect to earn on these bonds, and why?

A: Bond yield is the expected return on an invested bond. It is the discount rate which calculates its…

Q: Describe what a common stock yield is and why it is important for an investor. Describe and explain…

A: Common stock yield- Common stocks are securities that represent individuals ‘ownership in a…

Q: ole do bond length and bond convexity play in determining the interest rate risk of

A: In the bond portfolio interest is one of the major factor affecting on the bond.

Q: While comparing two bonds with the same face value, the price is all you need to determine which one…

A: Investment Bonds: Investment bonds are financial securities in which the authorized issuer owes a…

Q: When comparing the stock market to the bond market, what are the risks and advantages of investing…

A: Introduction: Investing in the stock market is purchasing stock in a business and so gaining…

Q: Is the risk-free rate equal to the yield on Treasury bonds?

A: Treasury Bonds. It is the government debt securities that has maturities greater than 20 years. It…

Q: Explain what a common stock yield is and why it matters to investors. Also, define and explain the…

A: The yield on common stocks: Common stocks represent individuals' ownership of a company. Individuals…

Q: why is ESG important for genera

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which are the most efficient combination of securities that provides investors with maximum…

A: The efficient frontier is a set of optimal portfolios that provide the greatest expected return for…

Q: What is the connection between the interest rate and the price of a fixed-coupon bond? Why is it…

A: Interest rate is the rate that is prevailing in the market on which you can invest your money. Fixed…

Q: How is risk defined and measured? How might the magnitude of the market risk premium impact…

A: In financial terms, the risk is referred to as the possibility that an outcome's actual gains will…

Q: How can we figure out the price of a bond's initial public offering (IPO)? Is it the same as the…

A: The price of the bond is the present value of cash inflows using the expected rate of return. There…

Q: The yield curve varies over time based the relative riskiness of buying a single long-term bond…

A: In finance and Bond the yield curve is important area because it deals with the graphical…

Q: What is relationship between the market risk of a stock and it's expected return?

A: Expected return is directly related to the market risk . Market risk is represented by beta. Higher…

Q: A yield curve compares expected returns of stock and bonds to their maturities. Select one: True OR…

A: A yield curve is a graph that gives interest rates of bonds over a range of maturities. The bond's…

Q: Is it beneficial for bondholders when the yield to maturity grows or decreases? Why?

A: Introduction: When the yield to maturity of a bond rises, the bond's price declines as a result of…

Q: Describe two different ways one can short equity market volatility

A: An equity market Volatility is the rate at which the price of a stock increases or decreases over a…

Q: how the zero-coupon rate bond provides return to the investor and elaborate on the advantages to the…

A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…

Q: If a firm increases its financial risk by selling a large bond issue that increases its financial…

A: Financial risk is an intrinsic component of investing and applies to organisations, governments,…

Q: Critically compare the riskiness of bonds and stocks from the valuation model perspective

A: The main fundamental difference between shares and bonds as investment options is the risk involved…

Q: Bond investors prefer short maturities. This is based on: a.default risk b.liquidity risk…

A: Default risk is the risk that the bond issuer may go bankrupt and therefore may not be able to pay…

Q: Why is there a cost for retained earnings? Group of answer choices Earnings can be reinvested or…

A: Retained earnings is the amount of net income which remains after the distribution of dividends.