Homework Answers
Price of debt security (using discount yield) = face value / (1 + discount yield)days to maturity/360
The first statement is incorrect. The price will always be lower than the face value.
The second statement is correct. As the days to maturity decrease, the price increases.
The third statement is incorrect. An increase in discount yield will decrease the price
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Question 3 1 pts Which one of the following is correct when computing the price of...
The par value of a bond is less than its current price. Which one of the...
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
Question 1 6 pts A 4.25% coupon rate bond...
Question 5 1 pts In a 365-day year country, what is the price (to the nearest...
Question 5 1 pts In a 365-day year country, what is the price (to the nearest $) of a $1m face value, commercial bill purchased 90 days before maturity at a yield to maturity of 3.0%p.a.? Question 6 1 pts An investment costing $1,000 produces a single payment of $3,500 after 5 years. Calculate the return on the investment (%p.a. to one decimal place eg 7.3%) assuming semi-annual compounding. None of the above 26.7% 16.4% 15.4% $ Snipping Tool -...
please help with question 1-4 D Question 1 1 pts You would like to purchase a...
please help with question 1-4
D Question 1 1 pts You would like to purchase a T-bill that has a $10,000 face value and is 68 days from maturity. The current price of the T-bill is $9,875. Calculate the discount yield on this T-bill. 6.804% None of these is correct 7.027% 6.620% 1326% Question 2 1 pts A bank has issued a six-month, $3 million negotiable CD with a 4.25 percent quoted annual interest rate. If you buy the CD,...
4.Which one of the following statements about the approach to bond pricing is NOT true? Select...
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...
is question 1 correct and how do you do question 2? 1. The of a firm's...
is question 1 correct and how do you do question 2?
1. The of a firm's debt can be used as the firm's current cost of debt. A) current yield B) coupon rate yield to maturity D) discount yield 2. The expected return on Target's equity is 11.5%, and the firm has a yield to maturity on its debt is 6%. Debt accounts for 18% and equity for 82% of Target's total market value. If its tax rate is 35%,...
Just Answers Need ASAP Question 46 Which one of the following represents the rate of return...
Just Answers Need ASAP Question 46 Which one of the following represents the rate of return a firm must earn on its assets if it is to maintain the current value of its securities? Select one: a. Cost of equity b. Internal rate of return c. Aftertax cost of debt d. Weighted average cost of capital e. Debt-equity ratio Question 47 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Great Lakes Packing has two bond issues...
Which of the following statements is CORRECT? a. The market price of a bond will always...
Which of the following statements is CORRECT? a. The market price of a bond will always approach its par value as its maturity date approaches, provided the bond’s required return remains constant. b. If the Federal Reserve unexpectedly announces that it expects inflation to increase, then we would probably observe an immediate increase in bond prices. c. The total yield on a bond is derived from dividends plus changes in the price of the bond. d. Bonds are generally regarded...
The following are correct descriptions about general characteristics of Bonds, EXCEPT: Question 3 options: Bonds in...
The following are correct descriptions about general characteristics of Bonds, EXCEPT: Question 3 options: Bonds in general generate a fixed coupon payment every period, until maturity expires. A bond that offers a fixed coupon payment in perpetuity is called a console. If the market interest rate increases, then the current price for bonds will increase. If the current price of a bond increases, its yield to maturity (YTM) will decrease.
Which of the following statements is CORRECT? A bond's current yield must always be either equal...
Which of the following statements is CORRECT? A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate. If a bond sells at par, then its current yield will be less than its yield to maturity. If a bond sells for less than par, then its yield to maturity is less than its coupon rate. A discount bond's price declines each year until it matures, when its...
Which of the following statements is CORRECT? 1. The yield on a 3-year Treasury bond cannot...
Which of the following statements is CORRECT? 1. The yield on a 3-year Treasury bond cannot exceed the yield on a 10‑year Treasury bond. 2. The yield on a 2-year corporate bond should always exceed the yield on a 2-year Treasury bond. 3. The yield on a 3-year corporate bond should always exceed the yield on a 2-year corporate bond. 4. The yield on a 10-year AAA-rated corporate bond should always exceed the yield on a 5-year AAA-rated corporate bond....
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
Question 1 6 pts A 4.25% coupon rate bond...
Question 5 1 pts In a 365-day year country, what is the price (to the nearest $) of a $1m face value, commercial bill purchased 90 days before maturity at a yield to maturity of 3.0%p.a.? Question 6 1 pts An investment costing $1,000 produces a single payment of $3,500 after 5 years. Calculate the return on the investment (%p.a. to one decimal place eg 7.3%) assuming semi-annual compounding. None of the above 26.7% 16.4% 15.4% $ Snipping Tool -...
please help with question 1-4
D Question 1 1 pts You would like to purchase a T-bill that has a $10,000 face value and is 68 days from maturity. The current price of the T-bill is $9,875. Calculate the discount yield on this T-bill. 6.804% None of these is correct 7.027% 6.620% 1326% Question 2 1 pts A bank has issued a six-month, $3 million negotiable CD with a 4.25 percent quoted annual interest rate. If you buy the CD,...
is question 1 correct and how do you do question 2?
1. The of a firm's debt can be used as the firm's current cost of debt. A) current yield B) coupon rate yield to maturity D) discount yield 2. The expected return on Target's equity is 11.5%, and the firm has a yield to maturity on its debt is 6%. Debt accounts for 18% and equity for 82% of Target's total market value. If its tax rate is 35%,...
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