Question

.       A bond pays a coupon of $120. If the market interest rate is 10%, then...

.       A bond pays a coupon of $120. If the market interest rate is 10%, then the bond will sell at a ___________. If the market interest rate is 15%, then the bond will sell at a __________.

discount; discount

premium; premium

discount; premium

premium; discount

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
(Bond valuation​) You own a bond that pays $120 in annual​ interest, with a ​$1,000 par...
(Bond valuation​) You own a bond that pays $120 in annual​ interest, with a ​$1,000 par value. It matures in 15 years. Your required rate of return is 10 percent. a. Calculate the value of the bond. b. How does the value change if your required rate of return​ (1) increases to 16 percent or​ (2) decreases to 6 ​percent? c. Explain the implications of your answers in part ​(b​) as they relate to interest rate​ risk, premium​ bonds, and...
a 20 year, 8% coupon rate, $1,000 par bond that pays interest semi-annually bought five years...
a 20 year, 8% coupon rate, $1,000 par bond that pays interest semi-annually bought five years ago for $850. this bond is currently sold for 950. what is the yield on this bond? a.12.23% b.11.75% c.12.13% d.11.23% an increase in interest rates will lead to an increase in the value of outstanding bonds. a. true b. false a bond will sell ____ when coupon rate is less than yield to maturity, ______ when coupon rate exceeds yield to maturity, and...
Your company issued a 10 percent coupon rate bond with the face value of $1,000. The...
Your company issued a 10 percent coupon rate bond with the face value of $1,000. The bond pays interest rate semiannually, and the bond has 20-year to maturity, the market required interest rate on the bond is 8 percent. (2 points) Is the bond selling at par, at discount or at premium? Explain. Write down the formula and find the price of this bond?
A five-year corporate bond with a face value of $10,000 pays interest at a coupon rate...
A five-year corporate bond with a face value of $10,000 pays interest at a coupon rate of 5.0%. The required return for investing in this bond is 4.0%. At what market price will the bond sell if the interest is paid semi-annually?
A bond has a $1,000 par value, makes annual coupon rate of 10%, has 5 years...
A bond has a $1,000 par value, makes annual coupon rate of 10%, has 5 years to maturity, cannot be called, and is not expected to default. The bond should sell at a premium if market interest rates are below 10% and at a discount if interest rates are greater than 10%. T/F
A) A Norwegian “oil”-bond has a 12 % coupon rate, matures in 20 years and pays...
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?
A bond has three years to maturity. It pays a 10% coupon rate annually, a $1000...
A bond has three years to maturity. It pays a 10% coupon rate annually, a $1000 face value, and the market rate of interest is 8%. What is the duration of the bond?
5. A bond has three years to maturity. It pays a 10% coupon rate annually, a...
5. A bond has three years to maturity. It pays a 10% coupon rate annually, a $1000 face value, and the market rate of interest is 8%. What is the duration of the bond?
A convertible bond pays interest annually at a coupon rate of 5% on a par value...
A convertible bond pays interest annually at a coupon rate of 5% on a par value of $1,000. The bond has 10 years maturity remaining and the discount rate on otherwise identical non-convertible debt is 6.5%. The bond is convertible into shares of common stock at a conversion price of $25 per share (i.e. the bond is exchangeable for 40 shares). Today's closing stock price was $20. What is the floor value of this bond?
1. A $1,000 par value corporate bond that pays $60 annually in interest was issued at...
1. A $1,000 par value corporate bond that pays $60 annually in interest was issued at par last year. The current price of the bond is $996.20. Pick the correct statement about this bond from below. The bond is currently selling at a premium. The current yield exceeds the coupon rate. The bond is selling at par value. The current yield exceeds the yield to maturity. The coupon rate has increased to 7 percent. 2. Dot Inns is planning on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT