The theoretical floor value for a convertible bond is its A. pure bond value. B. onversion price. C. conversion value. D. par value.

1. Can issue characteristics (such as coupon and call features) affect the yield and price behavior of bonds? Explain.

Which of the following bond types has the greatest risk for investors? Select one: a. debentures b. mortgage bonds c. floating rate bonds d. subordinated debentures

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

Define the following: Convertible Bond: Yield to Maturity: call feature

The process of bond valuation is based on the fundamental concept that the current price of a security can be determined by calculating the present value of the cash flows that the security will generate in the future. There is a consistent and predictable relationship between a bond’s coupon rate, its par value, a bondholder’s required return, and the bond’s resulting intrinsic value. Trading at a discount, trading at a premium, and trading at par refer to particular relationships between a bond’s intrinsic value and its par value. This also results from the relationship between a bond’s coupon rate and a bondholder’s required rate of return. (1) Remember, a bond’s coupon rate partially determines the interest-based return that a bond ________ pay, and a bondholder’s required return reflects the return that a bondholder (2) ___________to receive from a given investment. The mathematics of bond valuation imply a predictable relationship between the bond’s coupon rate, the bondholder’s…

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

Identify Common Bond Investment Strategies: Interest Rate Strategy: Passive Strategy: Maturity Matching

The debt component of convertible bonds issued using IFRS is the a. present value of the future cash flows at the market interest rate b. present value of the future cash flows at the stated interest rate c. market value of similar bonds without a conversion feature d. same as the calculation for GAAP

Identify/explain the relationship between coupon rate and yield to maturity for:   Discount Bonds Premium Bonds Par Value Bonds