Question

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

Answer #1

Answer: Face Value

Use the bond term's below to answer the question
Maturity 6 years
Coupon Rate 4%
Face value $1,000
Annual Coupons
Market Interest Rate 6%
Assuming the YTM remains constant throughout the bond's life, what
is percentage capital gains/loss between periods 3 and 4 ?
Group of answer choices
1.71%
1.86%
1.77%
1.83%

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

Use the bond term's below to answer the question.
Maturity 6 years
Coupon Rate 4%
Face value $1,000
Annual Coupons
Market Interest Rate 6%
Assuming the YTM remains constant throughout the bond's life, what
is percentage capital gains/loss between periods 3 and 4 ?
Group of answer choices:
A. 1.86%
B. 1.77%
C. 1.71%
D. 1.83%

If a bond's yield to maturity exceeds its coupon rate, the
bond's:
d. current yield is equal to the capital gain on the maturity of
the bond.
b. price must be less than its par value.
a. current yield is equal to the coupon rate.
c. maturity value is more than its face value.

Choose all correct statements.
1.The yield to maturity on a premium bond exceeds the bond's
coupon rate
2.The higher the yield to maturity, the lower the current price
of the bond.
3.All else equal, the current price of a bond increases when the
coupon rate decreases.
4.The regular interest payment of a bond is called the coupon
payment. Group of answer choices

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

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?

Based on the following info for a bond- what is the bond's
coupon rate?
Years to Maturity- 25
Par Value- 1,000
Interest Rate 0.1
Current Price 1,200

The yield to maturity for a bond is:
the interest rate on the bond, relative to its face value, when
it is issued.
the discount rate that makes the present value of the coupon and
principal payments equal to the price of the bond.
calculated by dividing face value of the bond by market
value.
calculated by dividing market value of the bond by its face
value.

1.
You own a bond with the following features:
Face value of $1000,
Coupon rate of 3% (annual)
12 years to maturity.
The bond is callable after 7 years with the call price of
$1,063.
If the market interest rate is 4.27% in 7 years when the bond
can be called, if the firm calls the bond, how much will it save or
lose by calling the bond?
State your answer to the nearest penny (e.g., 84.25)...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 3 minutes ago

asked 8 minutes ago

asked 10 minutes ago

asked 10 minutes ago

asked 15 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 25 minutes ago

asked 29 minutes ago

asked 30 minutes ago

asked 34 minutes ago