When the market interest rate is the same as the coupon rate for a particular quality...
When the market interest rate is the same as the coupon rate for
a particular quality of bond, the bond will be priced:
| below its par value |
| at its par value |
| above its par value |
| The bond price cannot be determined |
Homework Answers
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When the market interest rate is the same as the coupon rate for
a particular quality...
When the market interest rate rises above the coupon rate for a particular quality of bond,...
When the market interest rate rises above the coupon rate for a particular quality of bond, the "current yield": will be below the coupon rate will be the same as the coupon rate will be above the coupon rate cannot be determined
1 points Question 7 When the market interest rate is 7% and the coupon rate is...
1 points Question 7 When the market interest rate is 7% and the coupon rate is 10%, a bond sells at a discount. liquidation value. a premium. par. Cannot be determined without more information
ield to maturity The Salem Company bond currently sells for $95544, has a coupon interest rate...
ield to maturity The Salem Company bond currently sells for $95544, has a coupon interest rate of 9% and a $1000 par value, pays interest annually, and as 18 years to maturity Calculate the yield to maturity (YTM) on this bond Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond. The yield to maturity on this bond is %. (Round to three decimal places.) ....
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be price...
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is 96. Journalize the following bonds payable transactions a. Issuance of the bonds on February...
The market price of a bond increases when the: coupon rate decreases. par value decreases. coupon...
The market price of a bond increases when the: coupon rate decreases. par value decreases. coupon is paid annually rather than semiannually. face value decreases. discount rate decreases.
1. Consider a bond paying a coupon rate of 12.25% per year semiannually when the market...
1. Consider a bond paying a coupon rate of 12.25% per year semiannually when the market interest rate is only 4.9% per half-year. The bond has six years until maturity. a. Find the bond's price today and twelve months from now after the next coupon is paid. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2...
Please double check answer and correct any that are wrong. 1. Exploring Finance: Coupon Bonds Coupon...
Please double check answer and correct any that are wrong.
1. Exploring Finance: Coupon Bonds Coupon Bonds Conceptual Overview: Explore the value of fixed-interest coupon bonds of different terms. This graph shows the value of 10% coupon bonds of different terms across differing market interest rates. Each bond pays INT = $100 at the end of each year and returns M = $1,000 at maturity. For comparison, the blue line depicts the value of a one-year bond. The term of...
6) Which of the following statements about bonds is true? A) If market interest rates are...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term bonds.
1. A bond with two years remaining until maturity offers a 3% coupon rate with interest...
1. A bond with two years remaining until maturity offers a 3% coupon rate with interest paid annually. At a market discount rate of 4%, find the price of this bond per 1000 of par value. 2. A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. At a market discount rate of 3%, find the price of this bond per 1000 of par value. 3. A zero-coupon bond matures in...
Which of the following is TRUE about interest rates? Bond yield is the single discount rate...
Which of the following is TRUE about interest rates? Bond yield is the single discount rate that gives the value of the bond equal to its par (or principal) value. Par yield is the coupon rate that causes bond price to equal to its market value. A repo rate is the rate implicit in a transaction where securities are sold and bought back at a higher price. A LIBOR rate is lower than the Treasury rate when the two have...
ield to maturity The Salem Company bond currently sells for $95544, has a coupon interest rate of 9% and a $1000 par value, pays interest annually, and as 18 years to maturity Calculate the yield to maturity (YTM) on this bond Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond. The yield to maturity on this bond is %. (Round to three decimal places.) ....
1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is 96. Journalize the following bonds payable transactions a. Issuance of the bonds on February...
Please double check answer and correct any that are wrong.
1. Exploring Finance: Coupon Bonds Coupon Bonds Conceptual Overview: Explore the value of fixed-interest coupon bonds of different terms. This graph shows the value of 10% coupon bonds of different terms across differing market interest rates. Each bond pays INT = $100 at the end of each year and returns M = $1,000 at maturity. For comparison, the blue line depicts the value of a one-year bond. The term of...
6) Which of the following statements about bonds is true? A) If market interest rates are above a bond's coupon interest rate, then the bond will sell below its par value. B) As the maturity date of a bond approaches, the market value of a bond will become more volatile. C) Bond prices move in the same direction as market interest rates. D) Long-term bonds have less interest rate risk than do short-term bonds.
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