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
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What is true regarding the value of a 5%-coupon bond with a FV
of $1,000 if...
A bond has a $1,000 par value, makes annual coupon rate of 10%, has 5 years...
A bond has a $1,000 par value, makes annual coupon rate of 10%, has 5 years to maturity, cannot be called, and is not expected to default. The bond should sell at a premium if market interest rates are below 10% and at a discount if interest rates are greater than 10%. True or False
A bond with an annual coupon of $100 originally sold at par for $1,000. The current...
A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9% Assuming no change in risk, this bond would sell at a order to compensate O A. discount; the issuer for the higher cost of borrowing OB. discount; the seller for the above market coupon rate O C. premium; the purchaser for the above market coupon rate OD. discount; the purchaser for the above market coupon rate...
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4.Which one of the following statements about the approach to bond pricing is NOT true? Select...
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Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70...
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A bond has the following terms: 1) a $1,000 par value; 2) annual interest payments of...
A bond has the following terms: 1) a $1,000 par value; 2) annual interest payments of $100; 3) coupon rate of 10%; 4) 5 years to maturity; 5) cannot be called, and 6) is not expected to default. (T/F) The bond should sell at a premium if interest rates are below 10% and at a discount if interest rates are greater than 10%. True or False?
8. You buy a 12-year 10 percent annual coupon bond at par value, $1,000. You sell...
8. You buy a 12-year 10 percent annual coupon bond at par value, $1,000. You sell the bond three yean is your rate of return over this three-year period? A 40 percent B. 10 percent C. 20 percent D. 30 percent 11. Duration True or false? Explain. a. Longer-maturity bonds necessarily have longer durations. b. The longer a bond's duration, the lower its volatility. c. Other things equal, the lower the bond coupon, the higher its volatility. d. If interest...
A coupon bond which pays interest of $60 annually, has a par value of $1,000, matures...
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A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9% Assuming no change in risk, this bond would sell at a order to compensate O A. discount; the issuer for the higher cost of borrowing OB. discount; the seller for the above market coupon rate O C. premium; the purchaser for the above market coupon rate OD. discount; the purchaser for the above market coupon rate...
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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...
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