Which of the following is TRUE about a bond's face (par) value? Select one: a. the face value of a bond is the same as the bond's price b. the par value of a bond is the interest payment c. the face value of a bond changes when yields change d. the value of a bond will always be equal to par at maturity.

Q: The price of a bond is the present value of promised future payments to the bondholder. A) True B)…

A: Bonds are units of securitized corporate securities that companies issue in the form of tradable…

Q: Describe the relationship between coupon rate and required rate of return that will result in a bond…

A: The question is asking about the relationship between the coupon rate of a bond and the required…

Q: If the yield of maturity of the bond is equal the coupon rate, the price of this bond will be? a.…

A: Bond value is the current worth of a bond on the basis of the present value of all the cash flows a…

Q: Why is the required rate of return on a bond different than the copoun rate

A: Bonds are the debt securities which are issued by the corporates or the government to raise the…

Q: The bid price for a bond quote is: Answer a. Fixed over the life of a bond b. The price at which the…

A: b. The price at which the bond dealer is willing to purchase the bond   Explanation: The bid price…

Q: Bond Price IC

A: Bond price and bond's yield to maturity are inversely related.

Q: Duration is a measure of __________________. A) yield to maturity of a bond. B) coupon rate of a…

A: Bonds are debt instruments issued by a company.   Duration is an important concept associated with…

Q: Bond price is: O Inversely related to cOupon rate and positively related to interest rate. O…

A: Bond are fixed interest bearing instrument that is issued to raise funds and has a fixed matuity…

Q: 2. For each of the following situation, identify whether a bond would be considered a premium bond,…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: do yo predict will happen the market equilibrium price of bonds if the yield to maturity on be is…

A: Yield to maturity is the rate of return realized on bond when bond is held till the maturity of the…

Q: when the bond price is above par or at a premium?

A: Coupon: Coupon is the annual or semiannual payment will be made by the issuer of the bond to its…

Q: The return on a bond is equal to the yield to maturity when     the holding period is longer than…

A: Explanation: The return on the bond is the return earned for holding the bond.   The yield to…

Q: Which of the following statements about the Macaulay duration of a coupon bond is true? Select one…

A: Macaulay duration of coupon bond is the time required to receive all cash flow from the bond based…

Q: The formula for the yield to maturity, i, on a discount bond is (Points : 1)i = (Face value –…

A: i= (Face Value-Discount price)/ Discount price or i = (Face value− Price)/Price

Q: A bond's par value is the same as market value. True or False

A: The bond is said to be a fixed investment type where at the bond holders land money to the issue…

Q: The Macaulay duration is the: a. The bond's semi-elasticity of the price with respect to the…

A: Duration of bond is very important in deciding the bond as investment.

Q: The following statements describe the general characteristics of price of the coupon bond. Which one…

A: The price of bond = sum of the present value of coupons + present value of face value when the…

Q: The yield to maturity on bonds is usually the same as a. yield to call. b. current yield. c. the…

A: The objective of the question is to identify which of the given options is usually the same as the…

Q: The price of a bond is equal to the sum of the interest payments and the face amount of the bonds.…

A: It is pertinent to note that the price of the bond comprises of two amounts. a) Present value of…

Q: Consider the following statements: 1. Ceteris paribus, Coupon bonds of the same maturity have less…

A: Bonds are a type of fixed-income security that represents a loan made by an investor to a borrower,…

Q: Which of the following measures the interest rate risk of a bond in dollars and cents? O Price Value…

A: Duration is a measurement of a bond's interest rate risk that considers bond maturity, yield, coupon…

Q: Consider three bonds X, Y , and Z, each of which pays $1000 if it does not default, and nothing in…

A: Bonds are interest-paying securities that are issued by a corporation or the government.

Q: 4. In which of the following situations will the book value of a bond be equal to its maturity…

A: The market rate is the yield rate in the market on bond and the coupon rate is the rate which is…

Q: f a bond’s coupon rate is greater than the investor’s required rate of return on the bond, would the…

A: Prices of bond depend on required rate of return on the bond and the prices of bond changes with…

Q: Identify and discuss the relations among a bond’s coupon rate, the yield required by the market, and…

A: Bond prices are the price that we see trading in the market. these prices can be calculated by…

Q: An option free bond’s value/price has an inverse relationship with interest rates/yield. If yields…

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: A bond's real rate of return is reflected by the bond's 1). YTM  2). Coupon Rate 3). Par Value  4).…

A: A bond is a debt security and it can be issued by a company or government in order to raise the…

Q: Which of the following statements is false?   A.   Other things being equal, an increase in a…

A: A bond is a fixed income instrument, that is used by borrowers to raise money at a certain interest…

Q: True or False: Assuming all else is equal, the shorter a bond's maturity, the more its price will…

A: Explanation : In simple words, the short term bonds are have lower volatility risk as compared to…

Q: The value of any bond should be: Select one: A. The future value of all the coupon receipts as well…

A: This question is related to bond valuation. We are given four options and we need to choose the…

Q: ecarrying (book) value of a bond at the time when it is issued is always equal to its par valu True…

A: A bond may be issued at Par, at a premium or at discount. If the coupon rate of bonds is equal to…

Q: For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to…

A: Discount bond  is a bond that is issued for less than its par value or face value. Discount bonds…

Q: To calculate the price of a coupon bond, the following information is required: Select one: O A.…

A: Debt markets are markets where you contribute within the institutions or trade substances by the…

Q: the yeild to maturity  on a bond with a price equalto its par value will?

A: Solution: The yield to maturity on a bond with a price equal to its par value will equal to its…

Q: What is the difference between a bond's coupon rate and its current market interest rate?

A: Bond's coupon rate is the cash interest rate that the bond is actually providing to the bond holders…

Q: Write down an equation for the three main components of the nominal long term interest rate on a…

A: These components reflect the various factors influencing the overall interest rate on a bond.

Q: What is the relationship between a bond's coupon rate and its current market interest rate

A: The annual interest rate paid to bondholders is known as the coupon rate. It's expressed in terms of…

Q: All else equal, a bond would be sold at __________ if its coupon rate is _________ its yield to…

A: Bonds are issued by companies to raise borrowings in exchange of interest or coupon payments at…

Q: A bond’s expected return is sometimes estimated by its YTM and sometimes by its YTC. Underwhat…

A: Yield to Maturity (YTM) is the total return for the bond from the time of purchase till its…

Q: The theoretical floor value for a convertible bond is its A. pure bond value. B. onversion price.…

A: Raising funds by issue of funds is one of the source used by the company in order to meet their…

Q: The process of bond valuation is based on the fundamental concept that the current price of a…

A: Remember, a bond’s coupon rate partially determines the interest-based return that a bond will pay,…

Q: a) All things being equal If a bond's coupon rate is higher than its yield to maturity (YTM), is the…

A: A bond represent a contract in which the bond holder gets periodic coupon interest and principal…

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.