5. Bond Relationships. Select one or more of the following phrases to complete the following sentences. increase , decrease, par, discount, premium, less than, more than, greater , less, fall, rise a. If the current interest rate exceeds the bond’s coupon rate, the bond will sell at a ___________. b. The value of a bond to increase if there is a/an ________ in interest rates. c. A bond’s coupon rate is more than the interest rate, therefore the bond is selling at a _____________.
5. Bond Relationships. Select one or more of the following phrases to complete the following
sentences.
increase , decrease, par, discount, premium, less than, more than, greater , less, fall,
rise
a. If the current interest rate exceeds the bond’s coupon rate, the bond will sell at a
___________.
b. The value of a bond to increase if there is a/an ________ in interest rates.
c. A bond’s coupon rate is more than the interest rate, therefore the bond is selling at a
_____________.
d. As interest rate increases the value of a bond will ______________.
e. If the bondholder’s required rate of return equals the coupon interest rate, the bond
will sell at _________.
f. A premium bond sells for ____________ as maturity approaches.
g. The discount bond sells for ____________ as maturity approaches.
h. A bondholder with a short-term bond is exposed to ___________ interest rate risk than
when owing a long-term bond.
i. When interest rates __________, the market required
j. If interest rates increase after a bond issue, the yield-to-maturity will ______,
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