Homework Answers
False.
Price of the bond is depend not only on the maturity period. The
price of the bond is depend on coupon rate, maturity period and
market rate.
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5) Before it matures, the price of any bond is always less than its face value....
True or false: Any price other than the equilibrium price will always result in less total...
True or false: Any price other than the equilibrium price will always result in less total surplus in the economy, or, equivalently, some deadweight loss.
Suppose a two percent coupon, $1,000 face value10-year bond is convertible any time before it matures...
Suppose a two percent coupon, $1,000 face value10-year bond is convertible any time before it matures into 100 shares of stock. The stock that it may be converted into is currently selling for $12. What is the lowest price this bond could be selling for right now?
The par value of a bond is less than its current price. Which one of the...
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
Question 1 6 pts A 4.25% coupon rate bond...
What is the face value of a simple bond that matures in one year if the...
What is the face value of a simple bond that matures in one year if the price of the bond is $1,900 and the interest rate of the bond is 8 percent? There are no intermittent interest payments. Express your answer in dollars. (Do not include the dollar sign or any commas in your answer.)
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.2296%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.1899%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond’s price: $ YTM: %
Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a...
Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a current market price of $989, and a 5 percent coupon. Which one of the following statements is correct concerning this bond? Multiple Choice The current coupon rate is greater than 5 percent. The bond is a money market instrument. The bond will pay less annual interest now than when it was originally issued. The current yield exceeds the coupon rate. The bond will pay...
Any regular coupon bond of any maturity will sell for its face value if the coupon rate is the same as yield of Maturity...
Any regular coupon bond of any maturity will sell for its face value if the coupon rate is the same as yield of Maturity. True or False
If a bond is selling at a premium (i.e., at a price more than its face...
If a bond is selling at a premium (i.e., at a price more than its face value), which of the following is true? Interest rates must have gone up since the bond was issued. The coupon rate is higher than the yield to maturity. The bond must be a zero-coupon bond. The coupon rate is lower than the yield to maturity. The bond must have been issued by the U.S. Treasury.
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon...
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon pays interest semiannually. The bond will mature in 20 years. The nominal yield to maturity is 14 percent. What is its value? If the market rate (yield) on a bond is less than its coupon rate (and remains that way), the value of that bond will always be below its par value until the bond matures, when its value will equal par.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
Question 1 6 pts A 4.25% coupon rate bond...
An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.2296%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:
Question 3 (4 points) A bond with a $1000 face value and an 4 percent coupon pays interest semiannually. The bond will mature in 20 years. The nominal yield to maturity is 14 percent. What is its value? If the market rate (yield) on a bond is less than its coupon rate (and remains that way), the value of that bond will always be below its par value until the bond matures, when its value will equal par.
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