If a bond's coupon rate is smaller than the yield to maturity, then
a) Not enough information
b) The face value payment must equal the initial purchase cost
c) The face value payment must exceed the initial purchase cost
d) The face value payment must fall short of the initial purchase cost
Which of the following bonds is different than the others?
a) (-90, 15, 15, 15, 105)
b) (-18, 3, 3, 3, 21)
c) (-45, 7.5, 7.5, 7.5, 50)
d) (-6, 1, 1, 1, 7)
Which of the following cash flow streams represent bonds that are trading at par? (select all that apply)
a) (-50, 2, 2, 50)
b) (-100, 5, 5, 105)
c) (-10, 1, 1, 12)
d) (-20, 1, 1, 21)
Which of the following must be true regarding the bond described by the cash flow stream (-100, 5, 105)? (select all that apply)
a) the bond is trading at par
b) it is equivalent to the bond (-50, 3, 53)
c) the coupon rate is 5%
d) the yield on the bond is 5%
If the coupon rate on a bond is greater than the yield on the bond, then which of the following must be true? (select all that apply)
a) The face value exceeds the price of the bond
b) The bond is trading above par
c) The price of the bond exceeds the face value
d) The bond is trading under par
Answer 1.
The correct answer is Option (c) The face value payment must exceed the initial purchase cost
If the coupon rate of bond is less than the yield to maturity , then the bond is selling at a discount which means that The face value payment must exceed the initial purchase cost.If the investor who is purchasing a bond at face value , the YTM is equal to its coupan rate but In case if the investor is purchasing the bond at discount , then the YTM will be higher than than its rate of coupon .Also , the bond which is purchased at premium will have YTM which is lower than the coupon rate .Hence Option C is correct .
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If a bond's coupon rate is smaller than the yield to maturity, then a) Not enough...
If a bond's coupon rate is smaller than the yield to maturity, then a) Not enough information b) The face value payment must equal the initial purchase cost c) The face value payment must exceed the initial purchase cost d) The face value payment must fall short of the initial purchase cost Which of the following bonds is different than the others? a) (-90, 15, 15, 15, 105) b) (-18, 3, 3, 3, 21) c) (-45, 7.5, 7.5, 7.5, 50)...
Which of the following bonds is different than the others? a) (-90, 15, 15, 15, 105) b) (-18, 3, 3, 3, 21) c) (-45, 7.5, 7.5, 7.5, 50) d) (-6, 1, 1, 1, 7) Which of the following cash flow streams represent bonds that are trading at par? (select all that apply) a) (-50, 2, 2, 50) b) (-100, 5, 5, 105) c) (-10, 1, 1, 12) d) (-20, 1, 1, 21) Which of the following must be true regarding...
If the coupon rate on a bond is greater than the yield on the bond, then which of the following must be true? (select all that apply) a. The price of the bond exceeds the face value b. The bond is trading above par c. the bond is trading under par d. the face value exceeds the price of the bond
If the coupon rate on a bond is greater than the yield on the bond, then which of the following must be true? (SELECT ALL THAT APPLY) a) The face value exceeds the price of the bond b) The bond is trading above par c) The price of the bond exceeds the face value d) The bond is trading under par
4. Mr. Peanutbutter and Princess Buttercup are both evaluating the same cash flow stream. Princess Buttercup, however, has better outside investment opportunities than Mr. Peanutbutter does and she faces a higher opportunity cost of time as a result. Which of the following will be true? a) Buttercup and Peanutbutter will have identical willingness to pay for the same cash flow stream b) Buttercup will be willing to pay more than Peanutbutter for the same cash flow stream c) Not enough...
1. If your effective annual discount rate is 7%, what is your effective quarterly interest rate? (express as a decimal to 3 digits, e.g. 7% should be written as 0.070) 2. If you had to amortize a $120,000 loan over a 10-year period into a payment stream that looks like a uniform annuity flow taking the time value of money into an account, then the value of the monthly payments at an APR of 9% on the loan must be...
#1. Part a. Which of the following bonds is different than the other? (choose one) (-45, 7.5, 7.5, 7.5, 50) (-18, 3, 3, 3, 21) (-6, 1, 1, 1, 7) (-90, 15, 15, 15, 105) Part b. Which of the folliwng cash flow streams represent bonds that are trading at par? (check all that apply) (-100, 5, 5, 105) (-10, 1, 1, 12) (-20, 1, 1, 21) (-50, 2, 2, 50) Part c. Which of the following must be true...
Explain why the yield of a bond that trades at a discount exceeds the? bond's coupon rate. ?(Select the best choice? below.) A. The bond can be purchased for a? discount, which gives it an? "extra return";? hence, the yield exceeds the coupon. B. The? bond's coupon yield is irrelevant. It trades at a discount because investors avoid these bonds. C. Because the value of the bond is? discounted, the return on the bond is reduced and the yield exceeds...
Which of the following cash flow streams represent bonds that are trading at par? (select all that apply) a) (-50, 2, 2, 50) b) (-100, 5, 5, 105) c) (-10, 1, 1, 12) d) (-20, 1, 1, 21) 9. Which of the following must be true regarding the bond described by the cash flow stream (-100, 5, 105)? (select all that apply) a) the bond is trading at par b) it is equivalent to the bond (-50, 3, 53) c)...
Which of the following must be true regarding the bond described by the cash flow stream (-100, 5, 105)? (select all that apply) a) the bond is trading at par b) it is equivalent to the bond (-50, 3, 53) c) the coupon rate is 5% d) the yield on the bond is 5%