7. What is a par value of a bond?* The amount borrowed by the issuer of the bond and returned to the investors when the bond matures The overall return earned by the bond investor when the bond matures The difference between the amount borrowed by the issuer of bond and the amount returned to investors at maturity The size of the coupon investors receive on an annual basis

7. What is a par value of a bond?* The amount borrowed by the issuer of the bond and returned to the investors when the bond matures The overall return earned by the bond investor when the bond matures The difference between the amount borrowed by the issuer of bond and the amount returned to investors at maturity The size of the coupon investors receive on an annual basis

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 8FPE: Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are...

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What is a par value of a bond? *I am not satisfy give downvote The amount borrowed by the issuer of the bond and returned to the investors when the bond matures The overall return earned by the bond investor when the bond matures The difference between the amount borrowed by the issuer of bond and the amount returned to investors at maturity The size of the coupon investors receive on an annual basis
Which of the following is true about a bondholder? At the beginning of the life of the bond, the firm will pay a price for a bond and will then receive coupon payments throughout the life of the bond and receive the return of the principal amount at maturity At the beginning of the life of the bond, the firm will receive a price for a bond and will then pay coupon payments throughout the life of the bond and pay the return the principal amount at maturity At the beginning of the life of the bond, the bondholder will pay a price for a bond and will then receive coupon payments throughout the life of the bond and receive the return of the principal amount at maturity At the beginning of the life of the bond, the bondholder will receive a price for a bond and will then pay coupon payments throughout the life of the bond and pay the return the principal amount at maturity
True or false? the YTM is the annual return that an investor earns on a bond of the investor purchases the bond today and sells it before maturity
The total annual return on a bond is indicated by a bond's: Question 47 options: Current yield Yield to maturity Coupon rate Capital gains yield
Please see attached. Definitions: Coupon is the regular interest payment of a bond. Coupon rate is the interest rate for the bond coupons, expressed in annual percentage terms. Par value is the principal amount to be repaid at the maturity of the bond. Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity. Maturity date is the expiration date of the bond on which the final interest payment is made as well as the principal repayment.
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(7.4) A bond's yield to maturity should not be confused with its which is a bond's annual coupon divided by its price. Unless the market value of the bond is equal to its the yield to maturity is determined by using a(n) approach. greatesser) te interest rate risk. (7.5) A allows the company to repurchase or "call" part or all of the bond issue at stated prices over a specific period. The difference between the and the is the call premium. Call provisions are often not operative during the first ; during this period of prohibition, the part of a bond's life. This is a bond is said to be
A bond's real rate of return is reflected by the bond's 1). YTM 2). Coupon Rate 3). Par Value 4). Selling Price 5). Redemption Value
The return an investor earns on a bond over a period of time is known as the holding period return, defined as interest income plus or minus the change in the bond's price, all divided by the beginning bond price. a. What is the holding period return on a bond with a par value of $1,000 and a coupon rate of 7.5 percent if its price at the beginning of the year was $1,070 and its price at the end was $960? Assume interest is paid annually. Note: Negative value should be indicated by parenthesis. Round your answer to 2 decimal places. Holding period return %
1. A “buy-and-hold” investor purchases a fixed-rate bond at a discount and holds it until it matures. Which of the following least likely contributes to the investor’s total return, assuming all payments are made as scheduled? A. Capital gain B. Principal payment C. Reinvestment of coupon payments D. Coupon income
The accrued interest on a bond is calculated by taking the fraction of the coupon period that has passed. True or False