Question

1. Which of the following items will NOT be included in the bond indenture?

a. The maturity length of the bond

b. The coupon rate of the bond

c. An options attached to the bond

d. The yield to maturitof of the band

2. You see that a corporate bond is selling for $1,083 Which of the following must be true?

The coupon rate on the bond is less than the current required yield to maturity

This bond is a discount bond

The coupon rate on the bond is greater than the current required yield maturity

This bond is a senior bond

Answer #1

1.d.The yield to maturity of the bond.

The yield to maturity of the bond is not mentioned on the bond indenture.

The following will be included in the bond indenture;

The maturity of the bond.

The coupon rate of the bond.

The options of the bond etc.

2.C.The coupon rate on the bond is greater than the current required yield to maturity.

If the price of the bond is greater than the face value ($1000) of the bond, it will be mainly because the required return on the bond is lower than the coupon rate.

The discount bond is a bond which will sell at a price lower than the face value.

Senior bond is one which is one with highest priority during the winding up of the company.

Which one of the following statements is true? Question 13
options: 1) A premium bond has a yield to maturity that is less
than the bond's coupon rate. 2) A discount bond has a coupon rate
that is higher than the bond's yield to maturity. 3) The yield to
maturity on a premium bond exceeds the bond's coupon rate. 4) The
current yield on a par value bond will exceed the bond's yield to
maturity. 5) The current yield on...

1) Which of the following statements is
correct?
a) If a bond is at a discount, the coupon rate is less than the
current yield, which is less than YTM.
b) Current yield is the ratio of annual coupon payment divided
by the par value.
c) When the coupon rate is higher than the market rate, the bond
is priced at a discount.
d) When the market rate is higher than the coupon rate, the bond
is priced at a...

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.

Which one of these is most apt to be included in a bond’s
indenture one year after the bond has been issued?
1. Written record of all the
current bond holders.
2. Price at which a bondholder
can resell the bond to another bondholder.
3. Current market price.
4.
Current yield.
5.List of collateral used as
bond security.

which of the following inforamtion cannot be found in bonds
indenture
the
coupon rate
the maturity of the bond
the price of the bond
the seller of the bond

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)....

A corporate bond with a 8 percent coupon was issued last year.
Which one of these would apply to this bond today if the yield to
maturity is 7 percent?
Select one:
a.
The current yield drops below the yield to maturity.
b.
The coupon rate has decreased to 7 percent.
c.
The bond is selling at par value.
d.
The bond is currently selling at a premium.
e.
The current yield exceeds the coupon rate.

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...

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...

A 15-year bond with a face value of $1,000 currently sells for
$1050. Which of the following statements is CORRECT?
a. The bond's current yield exceeds its coupon rate
b. the bond's current yield is less than its yield to
maturity
c. the bond's yield to maturity is less than its coupon rate
d. the bond's current yield is equal to its coupon rate
e. if the yield to maturity stays constant until the bond
matures, the bond's price will...

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