Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- The method used to value a default-free zero coupon bonds (such as T-bills) requires that the interest is deducted from the face value of the bonds in advance. a.rediscounting b.market price c.forward price d.discount interestarrow_forwardInterest Rate risk depends upon how sensitive the bond price is to interest rate changes (i.e., maturity and coupon rate). T/Farrow_forwardHow is the price determined for a bond (or bond issue)?arrow_forward
- Pls help ASAParrow_forwardWhat is a bond spread and how is it related tothe default risk premium? How are bond ratingsrelated to default risk? What factors affect a company’s bond rating?arrow_forward1. A “buy-and-hold” investor purchases a fixed-rate bond at a discount and holds it until it matures. Which of the following least likely contributes to the investor’s total return, assuming all payments are made as scheduled? A. Capital gain B. Principal payment C. Reinvestment of coupon payments D. Coupon incomearrow_forward
- When bonds are redeemed before maturity, how is the gain or loss onredemption determined? Why does the calculation differ for bondsissued at face value, at a premium, and at a discount?arrow_forward25) The coupon rate is identified on the bond indenture and determines the amount of cash payment for each period. TRUE FALSEarrow_forwardA bond's yield to maturity is the annualized percentage return of both interest and capital gains or losses if the bond were held until it matured. Select one: True Falsearrow_forward
- What is the straight-line amortization approach with regards to a bond discount or premium?arrow_forwardWhat are the circumstances in which one may buy a bond certificate at a price that is higher or lower than par?arrow_forwardwhich of the below does not qualify a bond ? a. Time to maturity b. Par Value c. Coupon rate d. Yield to Maturity e. Current yieldarrow_forward
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