in a highly efficient market yield to maturity rate is equal to the market rate |
the market is adjusted due to the current yield of a bond and its redeemed value. |
so option d is correct. |
option a is incorrect as coupon rate divided by market price gives the current yield |
option b is incorrect as annual interest divided by face value provide the coupon value |
option c is incorrect as current yield is not equal to the yield to maturity |
The yield to maturity on a bond is: Select one: a. Coupon rate divided by the...
The ____ yield is the annual dollar coupon interest paid on a bond divided by the bond's current market price. Select one: a. interest b. coupon c. capital gain d. total
A corporate bond has a coupon rate of 10.2%, a yield to maturity of 11.8%, a face value of $1,000, and a market price of $948. Therefore, the annual interest payment is A) $101.75 B) $102.00 C) $105.50. D) $118.00.
Which of the following are characteristics of a premium bond? I. coupon rate < yield-to-maturity II. coupon rate > yield-to-maturity III. market price > face value IV. market price < face value A. II and IV only B. I only C. I and III only D. II and III only
Guggenheim, Inc. offers a 8.1% coupon bond with annual payments. The yield to maturity is 5.85% and the maturity date is 9 years. What is the market price of a $750 face value bond? Select one: a. 721.36 b. 1064.60 c. 649.15 d. 958.70 e. 865.53
4.Which one of the following statements about the approach to bond pricing is NOT true? Select one: A. To calculate a bond's price, one needs to calculate the present value of the bond's expected cash flows. B. The value, or price, of any asset is the future value of its cash flows. 6.Which one of the following statements is NOT true? Select one: A. The yield to maturity of a bond is the discount rate that makes the present value...
Suppose that a bond has one year to maturity. The yield to maturity on the bond if it was »%. (Round your response to the nearest whole number) Consider a coupon bond with a face value of $900, one year to maturity, and a coupon rate of 8% Given a bought for $1130.00 and has a $1 100 face value with a coupon rate of 7% yield to maturity of8%the price the bond wil sel tris (Round your response to...
If a coupon bond has two years to maturity, a coupon rate of 8%, a par value of $800, and a yield to maturity of 12%, then the coupon bond will sell for $ (Round your response to the nearest two decimal place) The price of a bond and its yield to maturity are Positively related, negitively related, or unrelated. which of the following statements is not true? A. The longer to maturity, the greater is the change in the...
If a coupon bond has two years to maturity, a coupon rate of 10%, a par value of S900, and a yield to maturity of 14%, then the coupon bond will sell for $(Round your response to the nearest two decimal place The price of a bond and its yield to maturity are Which of the following statements is not true? O A. Current yield is a worse approximation of yield to maturity for long-term bonds when compared to short-term...
37. Consider a five-year bond with a 10% coupon that has a present yield to maturity of 8%. If interest rates remain constant, one year from now the price of this bond will be: a) Par b) Higher c) Lower d) The same e) None of the above 38. ABC issued in 2018 a fifteen-year bond with coupon interest rate 4% and €1,000 face value. Today this bond is sold at €900. Which is the bond’s current yield? a) 0.062...
Gary Jones has identified a zero coupon bond for investment in one of his portfolios. With a face value of $1,000, a final maturity of 15 years and a current market interest rate (YTM) of 3.65%, he is computing the fair price that he should pay today. If he assumes semi-annual compounding, the price of the bond should be $ (Select) 4. If the market interest rate (YTM) does not change, the value of the bond will [Select] > Gary...