Question

A 15-year bond with a face value of $1,000 currently sells for $1050. Which of the...

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 go up

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A 15-year bond with a face value of $1,000 currently sells for $850. Which of the...
A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is CORRECT? The bond’s coupon rate exceeds its current yield. The bond’s current yield exceeds its yield to maturity. The bond’s yield to maturity is greater than its coupon rate. The bond’s current yield is equal to its coupon rate. If the yield to maturity stays constant until the bond matures, the bond’s price will remain at $850.
A bond is currently priced at $1050 on a par value of $1,000. Its term to...
A bond is currently priced at $1050 on a par value of $1,000. Its term to maturity is 20 years and its coupon rate is 8% (stated annually, paid semiannually). If you buy the bond, and hold it to maturity, what would be the yield to maturity?
If a bond with face value of $1,000 and a coupon rate of 8% is selling...
If a bond with face value of $1,000 and a coupon rate of 8% is selling at a price of $1,070, which of the following regarding the bond's yield to maturity is correct? Yield to maturity is less than 8%. Yield to maturity is more than 8%. Yield to maturity equals 8%. None of the above is correct.
A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon...
A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon rate and 6% yield to maturity. Which of the following statements about the bond is NOT true? The market price of bond is higher than $1000. A year from now if the yield to maturity stays the same, the market price of the bond will be higher than what it is today. If you buy the bond today and hold it until the bond...
A 1,000 dollar face value bond currently has a yield to maturity of 5.47 percent. The...
A 1,000 dollar face value bond currently has a yield to maturity of 5.47 percent. The bond matures in 25 years and pays interest semiannually. The coupon rate is 8.25 percent. Whaat is the current price of bond
17. Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000,...
17. Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a current market price of $989, and a 5 percent coupon. Which one of the following statements is correct concerning this bond? A. The current coupon rate is greater than 5 percent. B. The bond is a money market instrument. C. The bond will pay less annual interest now than when it was originally issued. D. The current yield exceeds the coupon rate. E....
Consider a bond with a 6​% annual coupon and a face value of ​$900. Complete the...
Consider a bond with a 6​% annual coupon and a face value of ​$900. Complete the following table. ​(Enter your responses rounded to two decimal​ places.) Years to Maturity Yield to Maturity Current Price 2 4​% ​? 2 6​% ​? 3 6​% ​? 5 4​% ​? 5 8​% ​? When the yield to maturity is ▼ less than greater than equal to the coupon​ rate, the​ bond's current price is below its face value. For a given​ maturity, the​ bond's...
Which one of the following statements is true? Question 13 options: 1) A premium bond has...
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...
A 15-year, semiannual coupon bond sells for $985.72. The bond has a par value of $1,000...
A 15-year, semiannual coupon bond sells for $985.72. The bond has a par value of $1,000 and a yield to maturity of 6.57 percent. What is the bond's coupon rate?
A bond pays an annual coupon on a face value of $1,000. The bond is currently...
A bond pays an annual coupon on a face value of $1,000. The bond is currently trading at $950 and its yield is 7%. I buy the bond today and sell it immediately after I receive the next coupon one year from now, at which time its yield is still 7%. If my capital gain is 5%, then what is the bond's coupon rate?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT