Question

A discount bond:

Select one:

a. Has a coupon rate which is greater than the yield to maturity.

b. Has a par value which is less than the market value.

c. Has a coupon rate which is less than the market rate of interest.

d. Is selling for more than face value.

e. Is the name given to a bond that has been called prior to maturity.

Answer #1

Answer: Has a coupon rate which is less than the market rate of interest.

Question 1 of 71
The yield to maturity on a coupon bond is …
· always greater than the
coupon rate.
· the rate an investor
earns if she holds the bond to the maturity date, assuming she can
reinvest all coupons at the current yield.
· the rate an investor earns
if she holds the bond to the maturity date, assuming she can
reinvest all coupons at the yield to maturity.
· only equal to the internal
rate of return of a bond...

When the discount rate or yield to maturity is lower than the
coupon rate the bond price is less than its par value.
a. True
b. False

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

Which of the following is (are) true?
A) If the yield to maturity is greater than the coupon rate, the
bond will sell at a premium.
B) If the yield to maturity is less than the coupon rate, the bond
will sell at a premium.
C) Market prices and interest rates are positively
correlated.
D) all of the above

All else constant, a coupon bond that is selling at a discount
must have
A.
a coupon rate that is equal to the bond yield
B.
a bond yield that is less than the coupon rate
C.
a market price that is higher than face value
D.
semi-annual coupon payments
E.
a coupon rate that is less than the bond yield

A) A Norwegian “oil”-bond has a 12 % coupon rate, matures in 20
years and pays interest semi-annually. The face value is 1,000 NOK.
What is the current price of this “oil”-bond if the market rate of
return (e.g. the discount rate) is 8 %?
B) Is this bond selling at par, premium or discount?
C) What is the current yield?
D) Is the yield to maturity (YTM) for this bond higher or lower
than the current yield?

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...

A premium bond has a coupon rate greater than the
required rate of return and the fair present value of the bond is
lesser than the face or par value.
True
False

A $1,000 face value
bond currently has a discount rate (yield-to-maturity) of 6.69
percent. The bond matures in three years and pays coupon annually.
The coupon rate is 7 percent. What type of bond it is?
Group of answer choices
Premium bond
Discount bond
Par bond
Zero-coupon bond

Suppose a seven-year, $1,000 bond with a 7.6% coupon rate and
semiannual coupons is trading with a yield to maturity of
6.54%.
a. Is this bond currently trading at a discount, at par, or at
a premium? Explain.
b. If the yield to maturity of the bond rises to 7.33% (APR with
semiannual compounding), what price will the bond trade for?
a. Is this bond currently trading at a discount, at par, or at
a premium? Explain. (Select the best...

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