All else equal, a bond would be sold at __________ if its coupon rate is _________ its yield to maturity. a. premium, lower than b. par, equal to c. discount, greater than d. discount, equal to
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All else equal, a bond would be sold at __________ if its coupon rate is _________ its yield to maturity.
| a. |
premium, lower than |
|
| b. |
par, equal to |
|
| c. |
discount, greater than |
|
| d. |
discount, equal to |
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Solved in 4 steps
- For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to maturity. Select one: O a. less than; less than O b. equal to; equal to O c less than; greater than O d. greater than; greater than O e. greater than; less thanAll else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. A. a discount; less than B. a discount; higher than C. a premium; equal to D. a premium; less thanA bond will sell at ____________ if the required return is greater than the coupon rate. Select one: a. A discount b. Liquidation value c. Par d. A premium
- The yield to maturity on a bond a is fixed in the indenture. b is lower for higher-risk bonds. c is the required return on the bond. d is generally equal to the coupon interest rate.D3) Show that a variable rate bond is priced at par if the coupons are paid with reference to the rate curve with which the flows are discounted.The formula for the yield to maturity, i, on a discount bond is (Points : 1)i = (Face value – Discount price)/Discount price.i = (Discount price – Face value)/Discount price.i = (Face value – Discount price)/Face value.i = (Discount price – Face value)/Face value
- K Bonds are priced in the market so that their A. stated rate B. yield OC. discount OD. par value is the same as the market rate of interest.If the yield of maturity of the bond is equal the coupon rate, the price of this bond will be? a. Lower than the par value. b. Equal the par value. c. Higher than the par value.If a bond sells for its par value, the coupon interest rate and yield to maturity are equal. True False *
- All else being constant, a bond will sell at __________ when the coupon rate is __________ the yield to maturity. Select one: a. a premium; equal to b. a premium; less than c. par; higher than d. a discount; less than Clear my choiceAll else constant, a bond will sell at A a premium; equal to B C D at par; greater than at par; less than a premium; greater than E a discount; greater than when the yield to maturity is the coupon rate.Bond A is a par bond and Bond B is a premium bond. All else equal, which bond has the lower coupon rate? Select one: a. B b. A=B c. A