Question

**Question 2**: What is a *bond*? Briefly
discuss the difference between a *coupon bond* and a
*zero coupon* bond. What are the characteristics of each?
Define *par value* as it relates to a bond.

Answer #1

Coupon bonds pay regular fixed annual or semi annual payments. They
can be discount bonds, premium bonds or par value bonds.Zero coupon
bonds are discount bonds and do not pay regular payments but par
value is received at the end of bond period.

Coupons bond are less sensitive to interest rate changes than zero
coupon bonds.The duration of zero coupon bonds is more than
duration of coupons.

Par Value is the face value of bond received at maturity.The
coupons are calculated as percentage of par value.

Question 3: Briefly discuss the difference
between a share of common stock versus a share of
preferred sock. What are the characteristics of each? What
is meant by a call provision?

The difference between the average yield on a risky zero-coupon
bond and a risk-free zero-coupon bond is the:
A.
liquidity risk premium.
B.
credit spread.
C.
expected loss.

what is the difference between ytm and coupon rate of
a bond .

10.What is the difference between arbitration and mediation?
11. What is a tort? List and briefly define two intentional
torts effecting business. 12. What is the Freedom of Information
Act and how does it work? 13. What is a contract? List and briefly
define three types of enforceable contracts. 14. Define the Statute
of Frauds. 15.Define collateral; list three types of collateral.
16. What is a mortgage? List and briefly discuss three methods of
mortgage termination. 17. Define the term...

Q.1: Consider a coupon bond with a $1,000 face value and 30
years left until maturity. The coupon rate equals 6%. If the
current yield to maturity of this bond is 8%, then the price of
this bond is closest to: The Answer is 774.84 or
775.
Q.2: Consider a zero-coupon bond with the same characteristics
as the coupon bond defined in the previous question (1). Assume
that the YTM does not change between year 30 and year 29 before...

Briefly discuss the difference between the following pair:
Quoted spread and effective spread

Briefly discuss the difference between the following pair: Quote
driven and order driven market

Suppose that a bond is purchased between coupon periods. The
days between the settlement date and the next coupon period are 80.
There are 182 days in the coupon period. Suppose that the bond
purchased has a coupon rate of 7% and there are 8 semiannual coupon
payments remaining. The par value of the bond is $100. a. What is
the full price for this bond if a 6.2% annual discount rate is
used? b. What is the accrued interest...

22. Consider a 2-year zero-coupon bond and a 2-year coupon bond
that both have a face value of $100. The coupon bond has a coupon
interest rate equal to 5%. Both bonds currently have the same yield
to maturity of 6%. Which statement is FALSE?
A) Both bonds are trading at a discount.
B) The zero-coupon bond is trading at a discount but the coupon
bond is trading at a premium.
C) The internal rate of return for both bonds...

Consider 2 bonds. One is a 5-year bond with an 8% coupon, paid
semiannually. The other is a zero coupon, 20 year bond.
a). What must be the required rate of return for the 5 year bond
for it to sell at par value?
b). If the required rate of return for the 5 year bond is 6%,
does the bond sell at a premium or a discount?
c). What is the price of the zero coupon bond if the...

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