Which one of the following terms applies to a bond that initially sells at a deep discount and only makes one payment to bondholders?
Callable
Income
Zero coupon
Convertible
Tax-free
Which one of the following terms applies to a bond that initially sells at a deep...
5 pts Question 8 Which one of the following terms applies to a bond that can be exchanged for the issuing company's common stock in the future? Callable . Municipal Zero coupon Convertible
A coupon bond which pays interest of $60 annually, has a par value of $1,000, matures in 5 years, and is selling today at a 584.52 discount from par value. The approximate yield to maturity on this bond is A6% B. 7% C. 8% D. 9% For a discount bond, its coupon rate is_than its yield to maturity and its price is expected to ___over the years. A B. C. D. Greater; increase Greater; decrease Lower; increase Lower; decrease A...
A zero-coupon bond with face value $1,000 and maturity of 3 years sells for $939.6. What is its yield to maturity? Enter your answer as a decimal, rounded to four decimal places. Your Answer: Answer uestion 11 (1 point) Two bonds have identical times to maturity and coupon rates. One is callable at 105, the other at 110. Which bond should be priced higher? Callable at 105 Callable at 110
I Need help with this A convertible bond has the following terms: Principal of $1000, coupon interest of 7%, maturity in 10 years, callable after five years at 1070. The conversion price is $40 (25 shares). The current price of the common stock is $4 Similar risk bonds have a yield to maturity of 8%. Would it make sense to convert the bond today, not convert it, or wait a while to decide whether to convert? Why (you should use...
1)Which one of these definitions is correct? Premium bond: bond that sells for less than face value Unfunded debt: long-term corporate debt Dirty price: market price, excluding accrued interest Negative covenant: a "thou shalt" agreement Call provision: issuer's right to repurchase a bond prior to maturity 2) A convertible bond can be exchanged for a newly issued bond if it carries a higher coupon rate. any other outstanding bond. shares of company stock. a new bond if the current bond’s...
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...
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...
The following three default-free bonds currently trade. Bond 1 pays 100 in one year and sells for $98:039: Bond 2 has a coupon rate of 2%, and Par Value=1000, matures in two years, and sells for $98:106: Bond 3 has a coupon rate of 5% and Par Value=1000 and matures in three years, and sells for $102:96: Determine the set of discount factors (d1;d2;d3) to five decimal places. Determine the term structure (z1;z2;z3) as percent to three decimal places. Assuming no arbitrage...
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 interest...
You are planning to buy a bond and are considering 2 options. Your one requirement is that you need to buy the lower price bond. Your desired nominal yield after tax is 4%, convertible semi-annually. The details of the 2 bonds under consideration are as follows: A corporate bond with a 10,000 par value, a 4 year term, and a coupon rate of 6% payable semi-annually. The tax rate applicable on corporate bond coupon payments is 30%. The bond will...