A bond that makes no coupon payments and is initially priced at a deep discount is called a Blank______. Multiple choice question. stripped bond callable bond convertible bond low-yield bond
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A bond that makes no coupon payments and is initially priced at a deep discount is called a Blank______.
stripped bond
callable bond
convertible bond
low-yield bond
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- Which of the following bonds has the least reinvestment risk?A. A bond that has a higher coupon rate than the yield-to-maturityB. A bond that has a lower coupon rate than the yield-to-maturityC. A zero-coupon bondA bond that pays a variable coupon payment over time is called a Blank______ bond. Multiple choice question. retractable floating-rate stripped junkZero-coupon bonds has higher yield than otherwise identical coupon paying bonds. Select one: True False
- A strip bond is Select one: O a. a financial tool that has an unknown payout b. a long term version of the treasury bill O c. a high end savings bond O d. a low yield bondIf a bond is attractive, it will experience a _____ amount of demand and ultimately sell for a _____. High; premium High; discount Low; premium Low; discountA bond that has an embedded put is more valuable at ( higher/lower)Over this region on the prince/yield curve you can see that a puttable bond has (more/less)value than an option-free bond. These bonds are valuable to the bond (holder/issuer)as they have the right to exercise the embedded put option.
- As compared to an equivalent noncallable bond, should a callable bond’s yield be higher, lower or the same and why?A callable bond will typically have a ________ yield than an otherwise identical bond without a call feature because ________. A) lower, the firm loses flexibility with a callable bond B) higher, the firm loses flexibility with a callable bond C) lower, the option to call a bond is valuable D) higher, the option to call a bond is valuablea. Explain the difference between a bond’s coupon,and itsyield to maturity.b. Describe a zero-couponbond
- The market value of a bond will be less than the par value if the market's required yield to maturity is bond is known as a the coupon interest rate. This below; discount bond O above; discount bond below; premium bond above; premium bond Not enough information WHolding other factors constant, the interest-rate risk of a coupon bond is higher when the bond's: Select one: a. term-to-maturity is lower or coupon rate is lower or yield to maturity is higher O b. term-to-maturity is higher or coupon rate is higher or yield to maturity is lower Oc. term-to-maturity is lower or coupon rate is lower or yield to maturity is lower d. term-to-maturity is higher or coupon rate is lower or yield to maturity is higher e. None of the answers are correctInterest rate risk refers to changes in the bond's ______________ (coupon rate, credit rating, par value, or yield to maturity) , whereby a decrease in that item causes bond values to ___________ (increase, decrease, vary randomly, or remain constant )
