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

Q: d. What is the bond’s yield to call?

A: Yield is that percentage of the securities at which the return is provided by the company to its…

Q: What is the excess of the issue price of bonds over their face amount called? premium discount…

A: Premium on Bonds: When bond market costs higher than its face value then bonds is called at premium.…

Q: Why does the yield on a discount bond surpass the coupon rate

A: Introduction:The bond will trade at a discount if the yield to maturity (YTM) exceeds the coupon…

Q: In general, how is the rate on a floating-rate bond determined?

A: The bond that changes in interest entirety in line with market interest rates or a few other…

Q: differences in bond interest rates reflect differences in default risk True or False . Expl

A: Each bond have different rate of return depending on nature of bond and period of bond and maturity…

Q: What economic circumstances might encourage investors to use a bond's convertibility feature

A: This question outlines how current economic conditions may encourage investors to use a bond's…

Q: Is having a call feature advantageous for a bond issuer? Why do you think that is?

A: A call provision seems to be a clause in a bond or even other fixed-income instruments agreement…

Q: . How is the value of a bond determined?

A: Bond valuation: It may be a method utilized to decide a given bond's hypothetical reasonable value.…

Q: What effect does collateral have on a bond's interest rate? What effect does subordination have on a…

A: There are various factors that impact a bond's price. We discount back the future cash flows of a…

Q: When might a bondholder use a convertibility feature?

A: This question illustrates how a bondholder can benefit from the convertibility provision.

Q: What is the relationship between interest rates and bond valuations? What are the fundamental…

A: A bond is borrowing security issued by the company to raise funds from the market by making an…

Q: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: Is it beneficial for a bond issuer to have a call feature? Why or why not?

A: Introduction : In simple words, bond call option refers to the option under which the holder gets…

Q: an you write clearly the function of: Price of bond Duration of bond

A: Price of bond is the present value of the coupon payment and present value of par value of bond that…

Q: What is the stated rate for a bond?

A:

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

A: The risk-free rate is the return that the investor gets by investing in security with zero risk. The…

Q: When yields change, what characteristics of a bond cause differential percentage price changes for…

A: Bonds have the following relationship between the yield and coupon rate: When the yield to maturity…

Q: How is the present value of a bond calculated?

A:

Q: As compared to an equivalent noncallable bond, should a callable bond’s yield be higher, lower or…

A: Bonds that are solely repaid at maturity are known as non-callable bonds. A bond's issuer is not…

Q: What effect do interest rates have on bond prices? What are the fundamental assumptions that go into…

A: SOLUTION-   A BOND REPRESENTS A PROMISE BY A BORROWER TO PAY A LENDER THEIR PRINCIPLE AND USUALLY…

Q: What is the link between the level of interest rates and the price of bonds? Why is it necessary for…

A: Introduction: Bonds are a sort of long-term debt that governments and enterprises often issue to…

Q: what is the difference between an investment grade bond and a junk bond?

A: Solution:- There are various companies like S&P etc, which give credit ratings to the companies…

Q: What exactly is a bond's "call" feature? What impact does the call feature have on bond premium or…

A: This question explains about a bond's "call" feature the call feature have on bond premium or…

Q: How does the carrying value of a bond gets amortized when selling it at discount?

A: The carrying value of bond represents the amount of Bond Face Value + unamortized premium (or )–…

Q: What is new issue bond?

A: The bond is a fixed income financial instrument that is issued by the government or by the companies…

Q: Describe Why Some Bonds are Risky: Default Risk: Risk Premium: Impact of Economic Conditions

A: Bonds are a type of a financial security or a financial asset (for the investor) and like all…

Q: Does it make any difference if the coupon rate on a bond is more than the needed rate of return on…

A: Introduction: Bond prices are determined by the needed rate of return on the bond, and bond prices…

Q: What impact do interest rates have on bond prices? What are the key assumptions that go into…

A: The answer are as follows

Q: What relationship exists between bond prices and interest rates? Describe the circumstances behind…

A: Introduction : Bonds are debt instruments issued by governments and significant enterprises to raise…

Q: what is difference between a bond and a term loan? what are the advantages of a term loan over a…

A: A bond is a fixed-income security that speaks to credit to a borrower (normally corporate or…

Q: Why is the yield of bonds with credit risk higher than that of otherwise identical default-free…

A: The question is based on the concept of calculation of yield to maturity in bond investment , the…