Question

Everything else held constant, the yield-to-maturity (YTM) of a bond __________.

will equal the coupon rate if the bond sells at par value |
||

will decrease if the price of the bond increases |
||

A and B are both correct |
||

will be lower than the coupon rate if the bond sells below par value |

Answer #1

Everything else held constant, the yield-to-maturity of a bond

**Will equal the coupon rate if the bond sells at par value because the only return/ yield for the bond will be that of the coupon****Will decrease if the price of the bond increases as the investor has paid above the par value to purchase the bond and will earn a yield lower than the coupon rate**

*A and B both are correct*

If the bond sells below par, the YTM on the bond will be higher than it's coupon rate as you also eaen because of the difference in maturity value and purchase price of the bond.

*Do let me know in the comment section in case of any
doubt.*

A bond has an 8 percent annual coupon and a yield to maturity
equal to 7.5 percent. Which of the following statements is most
correct?
a. If the yield to maturity remains constant, the price of the
bond is expected to increase over time.
b. The bond has a current yield greater than 8 percent.
c. If the bond is callable, the YTM is a better estimate of this
bond’s expected return.
d. The bond price will decrease when there...

If the coupon rate is equal to the yield to maturity on a bond,
then the price of the bond is always equal to the par value.
Is this statement true or false? Explain and support your answer
with an example.

Given everything else is constant how does different time to
maturity affect the duration of a bond?
Given everything else is constant how does different coupon rate
or bond yield affect the price of a bond?

Choose all correct statements.
The yield to maturity on a discount bond exceeds the bond's
coupon rate
The higher the yield to maturity, the lower the current price
of the bond.
All else equal, the current price of a bond increases when the
coupon rate decreases.
The regular interest payment of a bond is called the coupon
payment.

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...

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

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

Bond A has 2 years to maturity, 5% coupon rate, 5% YTM, $1000
par value, and semiannual coupons.
Bond B has 10 years to maturity, 5% coupon rate, 5% YTM, $1000
par value, and semiannual coupons.
Bond C has 10 years to maturity, 4% coupon rate, 5% YTM, $1000
par value, and semiannual coupons.
Which comparison is TRUE?
A.
Bond A has higher price sensitivity than Bond B
B.
Bond C has higher price sensitivity than Bond A
C.
Bond...

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 10-year bond with a 8% annual coupon has a yield to maturity
of 9%. Which of the following statements is CORRECT?
a. The bond’s current yield is greater than 9%.
b. If the yield to maturity remains constant, the bond’s price
one year from now will be higher than its current price.
c. The bond is selling above its par value.
d. If the yield to maturity remains constant, the bond’s price
one year from now will be lower...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 21 minutes ago

asked 22 minutes ago

asked 36 minutes ago

asked 41 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 3 hours ago