hould you sell a bond if market rate is higher than coupon rate? Explain.
hould you sell a bond if market rate is higher than coupon rate? Explain.
Homework Answers
We should sell the bond before market rate goes Higher than our coupon rate because in such situations price of the bond will decrease because in market other options are paying higher return than our bond so our must be at lower price than other Investment options those are paying better return than our bond. So we should sell out our bond when interest into the market is set to be higher than the coupon rate on the bond.
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hould you sell a bond if market rate is higher than coupon rate?
Explain.
if a bonds coupon rate is greater than market, then the bond will sell at price...
if a bonds coupon rate is greater than market, then the bond
will sell at price
QUESTION 3 If a bond's coupon rate is greater than market rate, then bond will sell at price than its face value; these are called bonds. less, discount less, premium more, premium more, discount Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All A
. If current market interest rates are higher than bond’s coupon rate, will the bond’s price...
. If current market interest rates are higher than bond’s coupon rate, will the bond’s price be higher or lower than the bond’s principal? Please explain why.
If its yield to maturity is less than its coupon rate, a bond will sell at...
If its yield to maturity is less than its coupon rate, a bond will sell at a _____, and increases in market interest rates will _____ . discount; decrease this discount discount; increase this discount premium; decrease this premium premium; increase this premium
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
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...
Which statement about yield is correct? For a coupon bond, if the yield is higher than...
Which statement about yield is correct? For a coupon bond, if the yield is higher than the coupon rate, then price>100 A zero-coupon bond may be priced above 100, assuming yield is positive For a given bond, the corresponding yield for price P1 is y1, and the yield for P2 is y2. If P1>P2, then y1<y2 The yield of a corporate bond is usually lower than the yield of a treasury debt, assuming the same maturity and coupon rate
What is true regarding the value of a 5%-coupon bond with a FV of $1,000 if...
What is true regarding the value of a 5%-coupon bond with a FV of $1,000 if market rates decrease from 10% to 8%? A. Coupon rate is higher than the market risk B. Bond will sell at par C. Bond will sell at larger discount D. Bond will sell at a smaller discount E. Bond is close to its maturity
Your broker offers to sell you a bond for $950. The bond has a coupon rate...
Your broker offers to sell you a bond for $950. The bond has a coupon rate of 6% and a maturity of 5 years. Given that the interest rate on comparable debt is 4% is your broker fairly pricing the bond? (Find the bond price today). Yes, the bond price today = the offer price No, the bond price today > the offer price No, the bond price today < the offer price
With market rates generally low, you are searching for a bond investment that pays a higher...
With market rates generally low, you are searching for a bond investment that pays a higher than usual income. You find one with a coupon rate of 6.5%. It matures in 12 years and is priced right now at $1,205.62. If you buy this bond and hold it for the full 12 years, what is your annual return on investment? a) about 4.29% b) about 2.14% c) about 5.30%
If a 3-year bond carries an 8% coupon rate, and market rate of return associated with...
If a 3-year bond carries an 8% coupon rate, and market rate of return associated with a bond of its risk level and type is 10%, what should the bond sell for?
if a bonds coupon rate is greater than market, then the bond
will sell at price
QUESTION 3 If a bond's coupon rate is greater than market rate, then bond will sell at price than its face value; these are called bonds. less, discount less, premium more, premium more, discount Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All 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...
Your broker offers to sell you a bond for $950. The bond has a coupon rate of 6% and a maturity of 5 years. Given that the interest rate on comparable debt is 4% is your broker fairly pricing the bond? (Find the bond price today). Yes, the bond price today = the offer price No, the bond price today > the offer price No, the bond price today < the offer price
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