Would there be positive interest rates on bonds in a world with absolutely no risk

Q: What is the connection between the interest rate and the price of a fixed coupon bond? Why is this…

A: The cost of bonds issued is attractive. Interest is paid at predetermined intervals. Bondholders are…

Q: How low does the market interest rate need to drop to justify refunding with a new bond issue?

A: Step 1 NPV is employed in capital budgeting and investment going to analyze the gain of a projected…

Q: If interest rates in the financial markets increase after a bond is issued, what will happen to the…

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Q: What is a maturity risk premium?   Group of answer choices -A premium that reflects interest rate…

A: Maturity risk premium: It is the additional return on investment when buying any bond with longer…

Q: Define the word "bond price elasticity." Would the elasticity of bond prices suggest that…

A: Introduction: Bond price elasticity refers to the degree to which a bond's price is sensitive to…

Q: Interest-rate risk results from:   a. Bond prices being fixed over the life of the bond b. Inflation…

A: Interest rate risk refers to the sensitivity of the bond prices to the interest rate changes. There…

Q: Are US Treasury bonds truly risk free?

A: United state treasury bonds are reflective of all such treasury securities which are protected…

Q: Explain why the dirty price of a bond might fall sharply before the next coupon is paid?

A: Dirty price of bond include clean price plus accrued interest.

Q: What is the relationship between…. a) bond prices and yields? b) bond prices and interest rates?…

A: a) In the other direction, bond rates and yield can be confounding if you are fresh to buying bonds.…

Q: During this economic doldrum or uncertainty caused by COVID-19 pandemic, which either of the two…

A: Convertible bonds means bonds can be convert to equity shares  Straight bonds means they fetch…

Q: Why is it an interest rate risk when investing in long-term bonds?

A: Long-term bonds are those bonds that have the longest maturity offering from U.S. Treasury.…

Q: Describe the relationship between bond prices and inclation. would you be more inclined to buy bonds…

A: Bond prices have an inverse relation o interest rates. When the interest rates increase, the bond…

Q: Is Treasury Bond Yield, the risk free rate?   Yes or No. Explain.

A: Introduction: Risk free rate is nothing but an investment’s return rate with no chance of loss. The…

Q: Why are U.S. Treasury bonds not completely riskless?

A: Answer: Usually, government issues treasury bonds (T-bonds). All the investment including treasury…

Q: What is the connection between the interest rate and the price of a fixed-coupon bond? Why is it…

A: Interest rate is the rate that is prevailing in the market on which you can invest your money. Fixed…

Q: If we were to keep a bond until maturity, would interest rate risk still matter? and why?

A: Bond Risk refers to various risks that are specifically associated with investment in bonds for…

Q: How do stocks and bonds differ in terms of the future payments that they are expected to make? Which…

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: Which one of the following statements is NOT true? As interest rates increase, bond prices increase.…

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: Why is there a risk of downgrading on long-term bonds?

A: Long-term bonds are usually for longer terms like 10, 20, 25 or 30 years. due to longer durations,…

Q: Why is the yield of bonds with credit risk higher than that of otherwise identical default-free…

A: The question is based on the concept of calculation of yield to maturity in bond investment , the…

Q: Why does the market value differ from its par value when the coupon interest rate does not equal the…

A: Par Value is the denominated value of bond which is used for coupon calculation whereas market price…

Q: Explain why bond prices fluctuate in response to changing interest rates. What adverse effect might…

A: Bonds are a type of debt security which is issued by government or corporates to collect funds from…

Q: Are interest rates of junk bonds always higher or lower than investment-grade bonds? Why?

A: A bond is a financial instrument that pays interest to the investor periodically and return of…

Q: Why do bond prices vary inversely with interest rates?

A: Interest rate is the amount charge by the lender for the use of an asset. It is charged on the…

Q: Why do bonds offer lower average rates of return thanstocks?

A: Bond is a form of debt issued by government or company. When a company issues a bond, it asks the…

Q: price of a long-term (longer-maturity) bond more or less sensitive to changes in interest rates than…

A: Long term bonds are more sensitive to change in interest rates than short term bond. If Interest…

Q: Interest-rate risk results from: Answer a. Bond prices being fixed over the life of the bond b.…

A: A bond is a type of debt security in which the issuer of a bond owes the holder debt and is obliged…

Q: Is the price of a long term bond or the price of a short term security more sensitive to a change in…

A: Bond prices and interest rates are inversely related. A fall in interest rate increases the Bond…

Q: what happens to the bond prices when interest rate falls?

A: At the point when interest rates increase, the bond price downfall, and bond costs ascend as loan…

Q: 1. What is the relationship between interest rate level and bond price? Why must this relationship…

A: 1. The interest rate and bond have an inverse relationship .when interest rate rise , the bond price…

Q: Why are the bonds treated as a conservative investment? Do you think the treasury bills are…

A: Bonds: Bonds are units of corporate debt that are issued by companies and are treated as tradeable…

Q: Interest rates and bond prices have a direct relationship? true or false

A: Bonds are fixed income debt instruments used by companies to raise funds. The investors in return…

Q: Does interest rate risk matter or is it negligible? Why/why not? Will it be important for one who is…

A: Interest rate risk : In simple words, the risk of losing value in a bond investment or in loan taken…

Q: explain how fluctuating market interest rates impact the price of a bond being sold on the secondary…

A: Bonds represent the liability for the company that is posted under the head non current liabilities…

Q: Which of the following is TRUE concerning the distinction between interest rates and returns? Select…

A: The Rate of return refers to a rate at which return is generated which is based on the initial…

Q: “Short-term interest rates are more volatile than long-term interest rates, soshort-term bond prices…

A: The short-term bond prices are fewer sensitive if associated with the prices of long-period bond to…