Which of the following is NOT TRUE about bond valuation? * a. Bonds can sell either for a discount or premium. b. The value of the bond does not necessarily equal or the same as its price. c. Bonds pays its cash flows through periodic interest payments and principal. d. None of the choices.
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Which of the following is NOT TRUE about bond valuation? *
a. Bonds can sell either for a discount or premium.
b. The value of the bond does not necessarily equal or the same as its price.
c. Bonds pays its cash flows through periodic interest payments and principal.
d. None of the choices.
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- Which of the following is TRUE about bonds? *a. If the bond price is greater than its par value, the bond is discounted.b. None of the choices.c. If the bond price is greater than its par value, the bond is traded at a premium.d. Coupon rates are always higher than the market rate.Which of the following is NOT TRUE about bond valuation? *a. Bonds can sell either for a discount or premium.b. The value of the bond does not necessarily equal or the same as its price.c. Bonds pays its cash flows through periodic interest payments and principal.d. None of the choices.e. Bond valuation is used to calculate the worth of the bond compared to its priceWhich of the following would both make the interest rate on a bond higher than otherwise? a. the interest it pays is tax exempt and it is short term b. the interest it pays is tax exempt and it is long term c. the interest it pays is taxed and it is long term d. the interest it pays is taxed and it is short term
- Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What happens if the interest rate rises to the present value of this bond payment?Why happens if the interest rate rises to the present value of this bond payment? A. Increases in present value B. The current value is unaffected. C. A decrease in present valueWhich of the following is TRUE for a coupon bond? Select one: a. The yield to maturity is greater than the coupon rate when the bond price is above the par value. b. The price of a coupon bond and the yield to maturity are positively related. c. When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate d. The yield is less than the coupon rate when the bond price is below the par valueStock prices fell throughout much of 2007 and 2008 and many investors decided to switch their funds into the bond market. What only about 30 percent of surveyed investors knew was that as bond prices rise, interest rates a. fall in reaction to the decreased demand for bonds. b. rise in reaction to the increased demand for bonds. c. fall in reaction to the increased demand for bonds. d. rise in reaction to the decreased demand for bonds.
- A bond that is bought at a price below its face value and the face value is repaid at a maturity date is called a: Select one: a. simple loan b. fixed-payment loan. c. Coupon bond. d. Discount bondSuppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present value of this bond payment if the interest rate increases? A. Present value increases B. Present value is not affected C. Present value declinesWhich of the following refers to the interest payments of the bond? *A. Coupon BondB. Present ValueC. Coupon RateD. Discount Rate
- Which of the following statements is correct regarding bonds? A. An increase in market interest rate would reduce a bond's yield. B. Bonds with high yields reflect high risk instruments. C. The equilibrium market price of a bond is always greater than the present value of that bond. D. A decrease in the market interest rate would result in a decrease in the present value of the bond. dont use chatgpt answerBond A pays $8,000 in 20 years. Bond B pays $8,000 in 40 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.) a. If the interest rate is 3.5 percent, what is the value of each bond today? Which bond is worth more? Why? (Hint: You can use a calculator, but the rule of 70 should make the calculation easy.) b. If the interest rate increases to 7 percent, what is the value of each bond? Which bond has a larger percentage change in value? c. Based on the example above, complete the two blanks in this sentence: "The value of a bond [rises/falls] when the interest rate increases, and bonds with a longer time to maturity are [more/less] sensitive to changes in the interest rate.Question 4. Working with Numbers and Graphs Q4 The face value of a bond is $6,000, and the annual coupon payment is $180. The coupon rate is_