Question

A bond issued at face (100%) would be issued at a discount. true or false

A bond issued at face (100%) would be issued at a discount.

true or false

Homework Answers

Answer #1

A BOND IS ISSUED AT A DISCOUNT WHEN IT IS ISSUED FOR A VALUE LESS THAN THE FACE VALUE. A BOND IS ISSUED AT A PREMIUM WHEN IT IS ISSUED FOR A VALUE HIGHER THAN THE FACE VALUE. A BOND ISSUED AT FACE VALUE IS NEITHER A BOND ISSUED AT DISCOUNT NOR ISSUED AT PREMIUM. A BOND IS ISSUED AT A DISCOUNT WHEN THE MARKET INTEREST RATES ARE HIGHER THAN THE COUPON RATE OF THE BOND

BASED ON THE ANALYSIS IT IS FOUND THAT THE STATEMENT WHICH IS GIVEN IN THIS QUESTION IS FALSE.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The face value of the bond is paid at the maturity of the bond. True False...
The face value of the bond is paid at the maturity of the bond. True False Which of the following is used as a discount rate while calculating the bond price? Yield to Maturity (YTM) Coupon Rate Face Value None Coupon payments are determined by multiplying face value of the bond with the coupon rate. True False Which of the following explains the differences in interest rates? The length of the investment (maturity premium). The level of risk of the...
1,The carrying value of a bond issued at a discount is its face value less the...
1,The carrying value of a bond issued at a discount is its face value less the unamortized portion of the discount?True or false? 2. What happens to the carrying value of bonds issued at a premium over the life of the bond issued ? a.decreases b.decreases c.stays the same 3.the issuance price on bonds sold at par value is a. less than the face value b. equal to the face value c. greater than the face value d. not determinable...
1. The face value of the bond is paid at the maturity of the bond. True...
1. The face value of the bond is paid at the maturity of the bond. True or false? 2. Which of the following is used as a discount rate while calculating the bond price? Yield to Maturity (YTM) Coupon Rate Face Value None 3. Coupon payments are determined by multiplying face value of the bond with the coupon rate. True or false? 4. Which of the following explains the differences in interest rates? The length of the investment (maturity premium)....
5) A zero-coupon bond: A. typically trades at a discount to face value B. would trade...
5) A zero-coupon bond: A. typically trades at a discount to face value B. would trade at a premium to face value in the rare circumstances that the bond has a negative yield C. both (A) and (B) are true. D. none of the above
True/ False Explain: A bond with a $100 annual interest payment with five years to maturity...
True/ False Explain: A bond with a $100 annual interest payment with five years to maturity (not expected to default) would sell for a premium if interest rates were below 9 percent and would sell for a discount if interest rates were greater than 11 percent.
True or false: A bond with a face value of $1,000 will have a current price...
True or false: A bond with a face value of $1,000 will have a current price of $1,000 if the coupon rate is equal to the yield to maturity.
A company issued 6% bonds with face value of Rs 1000 crores at a discount of...
A company issued 6% bonds with face value of Rs 1000 crores at a discount of 5% in April 2018. The issue cost of the bond amounted to 2% of the face value. If the effective rate of interest was 7% then determine the carrying amount of bond in the balance sheet as on 31.03.2020
If the beginning balance of the bond (issued at a discount) is $885.30, the cash payment...
If the beginning balance of the bond (issued at a discount) is $885.30, the cash payment is $50 (coupon rate is 5%, face value of bond is $1,000), and the annual market interest rate for the period is 6%, what is the amount of amortization and the ending balance of the bond?
Identify three differences between a bond issued at a discount versus a bond issued at a...
Identify three differences between a bond issued at a discount versus a bond issued at a premium, using the effective-interest method of amortization.
Suppose that Starbucks Corporation (SBUX) issued a two-year bond with a face value of $1000 and...
Suppose that Starbucks Corporation (SBUX) issued a two-year bond with a face value of $1000 and an annual coupon rate of 6%. The yield to maturity on this bond when it was issued was 5%. What was the price of this bond when it was issued? Does this bond trade at a discount, at par, or at a premium? Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT