Question

If the market believes that a bond's stated interest rate is
generous (high), the bond will sell at a discount.

Group of answer choicesTrue

False

Answer #1

The bond will sell at premium , not at discount.

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If the coupon rate on a bond equals the market interest rate,
then the bond's price will equal
Group of answer choices
The coupon rate
The capital gains rate
the face value

.
A bond pays a coupon of $120. If the market interest rate is 10%,
then the bond will sell at a ___________. If the market interest
rate is 15%, then the bond will sell at a __________.
discount; discount
premium; premium
discount; premium
premium; discount

if the market rate of interest is 6%, a $10,000, 10 year bond
with a stated annual interest rate of 8% would be issued at an
amount of

When a bond's yield to maturity is higher than the bond's coupon
rate, the bond:
A. has a high risk of default
B. has reached its maturity date
C. is selling at a discount
D. is priced at par
E. is selling at a premium

For a zero-coupon bond:
A.
The coupon rate is lower than the market rate
B.
The cash received from investors is less than the bond's face
value
C.
Amortization of bond discount equals to the interest expense
D.
The bond's net book value rises over time
E.
All of the above

There is a corporate bond in the market that is selling for
$1,136.96 each, stated rate of interest of 8.23% with a maturity of
3 years. What is the yield-to-maturity (YTM) of this bond?
How can i find the PMT that goes into the financial
calculator?

1.If a bond sells at a premium,
(A)interest expense can not be calculated.
(B)cash interest will equal interest expense each period.
(C)interest expense exceeds cash interest each period.
(D)cash interest exceeds interest expense each period.
2.
A bond will sell at a discount when
(A)the stated rate is less than the market rate
(B)the stated rate is more than the market rate
(C)interest rates fall
(D)the company's stock price goes down

A)
As with most bonds, consider a bond with a face value of $1,000.
The bond's maturity is 22 years, the coupon rate is 12% paid
annually, and the discount rate is 12%.
What is this bond's coupon payment?
B)
A bond offers a coupon rate of 14%, paid semiannually, and has a
maturity of 6 years. Face value is $1,000. If the current market
yield is 5%, what should be the price of this bond?

If the market price of a bond increases, then the bond's
____________ will decrease.

1. The stated rate of interest and the effective rate of
interest are synonymous terms. This statement is
A. True
B. False
2. On January 1, Year 1 Residence Company issued bonds with a
$50,000 face value. The bonds were issued at 96 offering a 4%
discount. They had a 20 year term, a stated rate of interest of 7%,
and an effective rate of interest of 7.389%.Assuming Residence uses
the effective interest rate method, the carrying value of the...

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