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A bond with a call feature Is attractive because the immediate receipt of principal plus premium...
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium...
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium produces a higher return. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond. None of the above.
If a bond is selling at a premium (i.e., at a price more than its face...
If a bond is selling at a premium (i.e., at a price more than its face value), which of the following is true? Interest rates must have gone up since the bond was issued. The coupon rate is higher than the yield to maturity. The bond must be a zero-coupon bond. The coupon rate is lower than the yield to maturity. The bond must have been issued by the U.S. Treasury.
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds...
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds before maturity. B) they can be converted into stock by the issuing company. C) they usually carry a higher rate of interest than non-convertible bonds. D) they usually carry a lower rate of interest than non-convertible bonds. E) they can be converted into stock at the holder's option. 4) The cash proceeds received from issuing a bond are less than the face value of...
a $500,000 bond issue sold at 101, therefore, the bonds: 1. sold at a premium because...
a $500,000 bond issue sold at 101, therefore, the bonds: 1. sold at a premium because the stated rate of interest was lower than the effective rate 2. sold for the 500,000 face amount plus $5,000 of accrued interest 3. sold at a discount bucause the effectice interest rate was lower than the face rate 4. sold at a premium because the stated rate of interest was higher than the yield rate
If you buy a bond for a premium, is your yield-to-maturity higher, lower or the same...
If you buy a bond for a premium, is your yield-to-maturity higher, lower or the same as the going market interest rates.
Chapter 9 Homework Assignment 1) A written promise to repay a loan principal plus interest at...
Chapter 9 Homework Assignment 1) A written promise to repay a loan principal plus interest at a specific future date is A) a promissory note. B) a line of credit. C) commercial paper. D) a product warranty. E) a returnable deposit. 2) ________ are subject to redemption before maturity at the option of the issuer. A) Debentures B) Mortgage bonds C) Callable bonds D) Sinking fund bonds E) Convertible bonds 3) Convertible bonds are attractive to investors because A) the...
True of False? 1.A convertible bond is a corporate bond with a call option to buy...
True of False? 1.A convertible bond is a corporate bond with a call option to buy the common stock of the issuer. 2.The value of a corporate bond without the conversion option is called its straight value. 3.The price that an investor effectively pays for the common stock if the convertible bond is purchased and then converted into the common stock is called the Market Conversion Price. 4.The higher the premium over straight value, the less attractive the convertible bond....
Hialurily date. • A bond issuer is said to be in default if it does not...
Hialurily date. • A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture! agreement or if it violates one or more of the issue's restrictive covenants. • A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a sinking fund provision • A bond's call provision gives the issuer the right to...
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...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had a 7% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places. % Explain why the...
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium produces a higher return. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond. None of the above.
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds before maturity. B) they can be converted into stock by the issuing company. C) they usually carry a higher rate of interest than non-convertible bonds. D) they usually carry a lower rate of interest than non-convertible bonds. E) they can be converted into stock at the holder's option. 4) The cash proceeds received from issuing a bond are less than the face value of...
Hialurily date. • A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture! agreement or if it violates one or more of the issue's restrictive covenants. • A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a sinking fund provision • A bond's call provision gives the issuer the right to...
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...
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