Chapter 6 Integrative Problem pg

Question 47: Match each financial function to its best description. PMT PV Table FV       Calculates the value of a bond at a later date Calculates the required payment for a bond Calculates the current value of a bond

Which of the following items are basic elements that affect the value of bond?   I. The required rate of return II . The interest payment III. The maturity period IV. The payback period   A. I and II B. I and III C. I, II and III D. IV only

4- How do you calculate the current value (price) of a bond? Explain through the formula and its description in your own words. How is the bond price affected by the change in interest rates and why?

Question No. 2                                                                                      What are the investment strategies of the bonds? And give a short comment for each.

Discuss how does the length of time until maturity for a bond influence the relationship between market rates of interest and bond price.

Question 6 - Two of the main factors in determining the price at which bonds will sell are   the contract rate and the coupon rate.   the contract rate and the stated rate.   the market rate and the discount rate.   the stated rate and the market rate.

Which of the following would NOT be listed on the face of a bond? Select one: a. The maturity date O b. The name of the issuing firm O c. The coupon payment to be made O d. The name of the investment banker e. The coupon interest rate

For a standard corporate bond, when are the following characteristics of the bond determined? ······ The amount that the issuer returns to the bondholder, when the bond matures. The maturity date. The bond's market yield. The bond's market price. The price that the bondholder pays to the issuer to acquire the bond. The amounts of any interest payments. The bond's coupon rate. The dates of any interest payments. 1. 2. Fixed before the bonds are sold and does not change. Fixed when the bonds are sold and does not change. 3. Fluctuates continually.

What is the relationship between bond prices and interest rates?  Verbally describe how this relationship comes about. How can we use this relationship to estimate the value of a bond?

Describe in detail the key features of a bond (face value, maturity, coupon rate, coupon, yield to maturity, current yield). What are the cash flows associated with a bond? What is a discount bond? Premium bond? Par bond? How does the price of a bond vary in relationship to market rates?

1. what are bonds and why would a company use them? 2.  how do you value a bond? 3. what are bond yields and what are the determinants of bond yields?

What does the clean price of a bond represent? Multiple choice question. The bond's quoted price The bond's original issue price The bond's original issue price plus the accrued interest The bond's quoted price plus the accrued interest

QUESTION 19 Which of the following is not a correct statement about the bond?     Bond can be either non-interest-bearing or interest-bearing.     Non-interest-bearing bonds sell at discount upon issuance.     Price of a discount bond will go up as it approaches maturity.     There is an inverse relation between the bond price and interest rate.     Baseline interest rate for the bond market is LIBOR rate.

New Ans Plz   If you had to determine the selling price of a bond, how would you do so? What determines the selling price of the bond?