When evaluating financial assets it is better to purchase securites trading at a premium to par....
When evaluating financial assets it is better to purchase securites trading at
|
a premium to par. |
||
|
a discount to par. |
||
|
par or maturity value. |
||
|
there is no advantage, all else equal, related to the purchase of an asset whose par value differs from the market value. |
Homework Answers
Answer:
There is no advantage, all else equal, related to the purchase of an asset whose par value differs from the market value.
Explanation:
The price of a security (which may be above or below the par value) would reflect the market interest rate at any point of time. Any further change in market interest rate would affect the value of the security inversely. Hence, there would be no advantage in purchasing a security which is quoted at a premium or discount, as it would also be affected by the changes in market interest rate.
Add Answer to:
When evaluating financial assets it is better to purchase
securites trading at
a premium to par....
The value of a financial security that is selling at a discount to par will ____________...
The value of a financial security that is selling at a discount to par will ____________ as the security approaches maturity, all else equal. -increase -decrease -stay the same -increase then decrease
All else constant, a bond will sell at _____ when the coupon rate is _____ the...
All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. a premium; less than a premium; equal to a discount; less than a discount; higher than par; less than
All else constant, a bond will sell at _____ when the yield to maturity is _____...
All else constant, a bond will sell at _____ when the yield to maturity is _____ the coupon rate. Multiple Choice a premium; equal to par; higher than par; less than a discount; higher than a premium; higher than
when the coupon the All else constant, a bond will sell at yield to maturity a...
when the coupon the All else constant, a bond will sell at yield to maturity a premium; less than a premium; equal to a discount; less than D. a discount; higher than par; less than с. 4 The Walthers Company has a semi-annual coupon bond outstanding tanding. An increase in the market rate of interest will have which of the following effects which of the following effects on the bond? increase the coupon rate decrease the coupon rate increase the...
If interest rates did not change from now until this bond's maturity,a bond with a yield...
If interest rates did not change from now until this bond's maturity,a bond with a yield of 7% and a coupon rate of 8% would: Group of answer choices: A) it would not be trading at all since the coupon does not equal the yield in the market. B) trade at a discount right now. Its price would gradually increase until it reaches par at maturity. C) trade at par. D) trade at a premium right now. Its price would...
4 Equity securities classified as trading Current Assets 5. Cash Current Assets 6. Accrued interest payable...
4 Equity securities classified as trading Current Assets 5. Cash Current Assets 6. Accrued interest payable due in 30 days Current Liabilities 7. Share premium-preference shares (Share Capital) 8. Warranty liability Current Liabilities 9. Currency held in the cash register Current Assets 10. Ordinary shares Share Capital 11. Long-term debt covenants Not Reported on Statement of Financial Position 12. Allowance for doubtful accounts (Current Assets) 13. Accumulated depreciation (Plant Assets) 14. Goodwill Intangible Assets 15. 90 day notes payable Current...
drop down 1 options: might or well drop down 2 options: is obligated or would like...
drop down 1 options: might or well
drop down 2 options: is obligated or would like
drop down 3 options: exceed, be less than, equal
drop down 4 options: at a discount, at par, at a premium
A. Variable drop down: Bond's semiannual coupon payment, Bond's
annual coupon payment, Bondholder's required return
A. Variable Value drop down: 35.00, 56,.00, 112.00, 140.00
B Variable Name drop down: Bond's Market Price, Bond's annual
coupon payment, Bond's par value
C. Variable Value drop...
1)The principal amount of a bond that is repaid at the end of the loan term...
1)The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon. B) face value. C) maturity. D) yield to maturity. E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1,000 in the market is called a bond. A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays interest...
1) The principal amount of a bond that is repaid at the end of the loan...
1) The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon B) face value. C) maturity D) yield to maturity E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1.000 in the market is called a bond A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays...
Buyers of financial assets: a. Remove the assets from their balance sheet. b. Accounts for the...
Buyers of financial assets: a. Remove the assets from their balance sheet. b. Accounts for the losses or gains on their income statements C. Add the item purchased to their balance sheet. d. Add the item purchased to their income statements. 10. Seller of a futures contract: a. Agrees to receive the underlying futures price or to deliver the underlying asset. b. is said to be short futures. C. Is said to be long futures. d. Both (a) and (b)....
when the coupon the All else constant, a bond will sell at yield to maturity a premium; less than a premium; equal to a discount; less than D. a discount; higher than par; less than с. 4 The Walthers Company has a semi-annual coupon bond outstanding tanding. An increase in the market rate of interest will have which of the following effects which of the following effects on the bond? increase the coupon rate decrease the coupon rate increase the...
4 Equity securities classified as trading Current Assets 5. Cash Current Assets 6. Accrued interest payable due in 30 days Current Liabilities 7. Share premium-preference shares (Share Capital) 8. Warranty liability Current Liabilities 9. Currency held in the cash register Current Assets 10. Ordinary shares Share Capital 11. Long-term debt covenants Not Reported on Statement of Financial Position 12. Allowance for doubtful accounts (Current Assets) 13. Accumulated depreciation (Plant Assets) 14. Goodwill Intangible Assets 15. 90 day notes payable Current...
drop down 1 options: might or well
drop down 2 options: is obligated or would like
drop down 3 options: exceed, be less than, equal
drop down 4 options: at a discount, at par, at a premium
A. Variable drop down: Bond's semiannual coupon payment, Bond's
annual coupon payment, Bondholder's required return
A. Variable Value drop down: 35.00, 56,.00, 112.00, 140.00
B Variable Name drop down: Bond's Market Price, Bond's annual
coupon payment, Bond's par value
C. Variable Value drop...
1)The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon. B) face value. C) maturity. D) yield to maturity. E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1,000 in the market is called a bond. A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays interest...
1) The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon B) face value. C) maturity D) yield to maturity E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1.000 in the market is called a bond A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays...
Buyers of financial assets: a. Remove the assets from their balance sheet. b. Accounts for the losses or gains on their income statements C. Add the item purchased to their balance sheet. d. Add the item purchased to their income statements. 10. Seller of a futures contract: a. Agrees to receive the underlying futures price or to deliver the underlying asset. b. is said to be short futures. C. Is said to be long futures. d. Both (a) and (b)....
Most questions answered within 3 hours.
-
Please use algebraic manipulation to prove the following
statement:
x'y'z' + x'yz' + x'yz + xyz'...
asked 38 seconds from now -
3.Another patient has a family history in which:
1. the disease was equally distributed among the...
asked 2 minutes ago -
If you are the TM of a shipper of cooking oil the sales
department wants to...
asked 33 seconds ago -
NEED THIS URGENTLY PLEASEEE
Suppose a fair coin is tossed 5 times and the result are...
asked 9 minutes ago -
Find the magnetic field B produced by several circular loops of
which has a radius given...
asked 17 minutes ago -
A mole of monatomic ideal gas is expanded from 0.45 L to 0.75L
at an external...
asked 16 minutes ago -
Carbon dioxide (CO2) gas is steadily pressurized and cooled by
sending it sequentially through a compressor...
asked 20 minutes ago -
calculare the standard deviation of a portfolio that contains 40%
of one stock with a standard...
asked 18 minutes ago -
When exposed to sunlight, a hole in a sheet of copper expands in
diameter by 0.160...
asked 35 minutes ago -
Economists believe that there are many nonmonetary gains from
further trade opening. Which of the following...
asked 37 minutes ago -
For message exchange over the Internet, the specific processes
that send and receive packets are identified...
asked 30 minutes ago -
How would
you create a group that promotes multicultural
understanding?
Should a
session conducted with youth...
asked 37 minutes ago