When comparing a highly liquid bond with a comparable but less liquid bond, the highly liquid...
When comparing a highly liquid bond with a comparable but less liquid bond, the highly liquid bind is more apt to have:
a. a longer maturity
b. a lower yield
c. a shorter maturity
d. a higher yield
Homework Answers
If a highly liquid bond with a comparable but less liquid bond, the highly liquid bind is more apt to have:
B. . a lower yield
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When comparing a highly liquid bond with a comparable
but less liquid bond, the highly liquid...
Bond prices are sensitive to changes in yield when the bond is selling at a initial...
Bond prices are sensitive to changes in yield when the bond is selling at a initial yield to maturity, more; lower O more; higher less; lower equally, higher or lower
Which of the statements (I-IV) is (are) most likely FALSE: I. When shorter maturity treasuries are...
Which of the statements (I-IV) is (are) most likely FALSE: I. When shorter maturity treasuries are yielding less than longer maturity treasuries, the yield curve is considered to be normal II. When shorter maturity treasuries start to yield more than longer maturity treasuries, the bond market is expecting the economy’s growth rate to slow, and the stock market usually falls in value shortly thereafter III. When shorter maturity treasuries are yielding more than longer maturity treasuries, it would be a...
A bond with a call feature Is attractive because the immediate receipt of principal plus premium...
A bond with a call feature Is attractive because the immediate receipt of principal plus premium produces a higher relurni. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond None of the above
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium...
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium produces a higher return. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond. None of the above.
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield...
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield to maturity of 7.24 percent. Which of these two bonds should an investor with a marginal tax rate of 28 percent buy? A. The corporate bond because it offers a higher after-tax yield to maturity. B. The corporate bond because its stated yield to maturity of 7.24 percent is higher than the municipal bond's stated yield to maturity of 5.08 percent. CC. The municipal...
When comparing CN3- and CNC, which of the following is true? CN3- has a single bond,...
When comparing CN3- and CNC, which of the following is true? CN3- has a single bond, CN is shorter and CN3- is stronger. CN3- has a triple bond, CN3- is shorter and CN is weaker. O CN3- has a single bond, CN is longer and CN3- is stronger. CN3- has a double bond, CN3- is longer and CN is stronger. CN3- has a double bond, CN3- is shorter and CN is weaker.
Which one of the following is true? When comparing a 20-year bond versus a Iyear bond,...
Which one of the following is true? When comparing a 20-year bond versus a Iyear bond, the 20-year bond has a much greater interest rate risk Treasury issues are exempt from federal income taxes but not state income taxes Interest Rate Rick is the risk that arises for bond owners from fluctuating interest rates All other things being equal the shorter the time to maturity, the lower the interest rate risk Interest Rate Risk is the risk that arises for...
Which is true about the "duration" of bonds? A. The longer the term, the shorter the...
Which is true about the "duration" of bonds? A. The longer the term, the shorter the duration. B. The lower the yield, the shorter the duration. C. For zero-coupon bonds, the term is the duration. D. Duration is related to yield (or internal rate of return) of a bond. Regarding bonds in the secondary market... A. their prices are unrelated to the prevailing interest rate environment. B. prices of bonds with more time to maturity are less sensitive to the...
B. shorter Bond (15 points) 14. (3 points) A bond is traded at premium and pays...
B. shorter
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All else constant, a bond will sell at _____ when the bond yield is _____ the...
All else constant, a bond will sell at _____ when the bond yield is _____ the coupon rate. A. at par; less than B. a premium; equal to C. a discount; lower than D. a premium; lower than E. at par; higher than
Bond prices are sensitive to changes in yield when the bond is selling at a initial yield to maturity, more; lower O more; higher less; lower equally, higher or lower
A bond with a call feature Is attractive because the immediate receipt of principal plus premium produces a higher relurni. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond None of the above
A bond with a call feature: Is attractive because the immediate receipt of principal plus premium produces a higher return. Is more apt to be called when interest rates are high because the interest saving will be greater. Will usually have a higher yield to maturity (i.e., lower price) than a similar noncallable bond. None of the above.
A municipal bond has yield to maturity of 5.08 percent. A comparable corporate bond has yield to maturity of 7.24 percent. Which of these two bonds should an investor with a marginal tax rate of 28 percent buy? A. The corporate bond because it offers a higher after-tax yield to maturity. B. The corporate bond because its stated yield to maturity of 7.24 percent is higher than the municipal bond's stated yield to maturity of 5.08 percent. CC. The municipal...
When comparing CN3- and CNC, which of the following is true? CN3- has a single bond, CN is shorter and CN3- is stronger. CN3- has a triple bond, CN3- is shorter and CN is weaker. O CN3- has a single bond, CN is longer and CN3- is stronger. CN3- has a double bond, CN3- is longer and CN is stronger. CN3- has a double bond, CN3- is shorter and CN is weaker.
Which one of the following is true? When comparing a 20-year bond versus a Iyear bond, the 20-year bond has a much greater interest rate risk Treasury issues are exempt from federal income taxes but not state income taxes Interest Rate Rick is the risk that arises for bond owners from fluctuating interest rates All other things being equal the shorter the time to maturity, the lower the interest rate risk Interest Rate Risk is the risk that arises for...
B. shorter
Bond (15 points) 14. (3 points) A bond is traded at premium and pays an annual coupon rate of 7%. Which one of the following is true about its yield to maturity (YTM)? a. YTM is higher than 7%. b. YTM is lower than 7%. c. YTM is equal to 7% d Not enough information to determine. 15. (2 points) If you are holding a premium bond, you must expect a each year until maturity. If you are...
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