A zero-coupon bond is a debt instrument that offers no return on investment. A True B False

Q: When a bond sells at a premium: O The contract rate is above the market rate O The contract rate is…

A: Premium is added to the market rate to make it to the contract rate. Premium increases the price of…

Q: The coupon rate is calculated on the bond's face value for par value). not on the issue price or…

A: Coupon rate is the interest rate for periodic interest payments on the bond.  Value of the bond =…

Q: Because the diversification benefit from adding another asset declines as the total number of assets…

A: Diversification means adding different type of assets in your portfolio so as to bring down the…

Q: Bonds with relatively low risk of default are called O junk bonds. zero coupon bonds.…

A: Bonds are type of debt which will help the company in order to raise the capital for the longer…

Q: Zero-coupon bonds are issued at prices below face value, and the investor's return comes from the…

A: Concept. Zero coupon bonds. Zero coupon bonds are the bonds that do not pay any interest to its bond…

Q: A zero-coupon bond pays no interest. Explain.

A:

Q: Debt will always have a cost basis. that is less than equity. OA. True OB. False

A: Debt - Debt is referred to as the amount of money that is borrowed by one party from another and is…

Q: The return payable on Bond is called Select one: a. Commission b. Discount c. None of the options d.…

A: Value of a bond: Value of a bond is the present value of the future cash flows discounted at a…

Q: Debentures are expected to have a higher yield than secured bonds because the debentures are more…

A: Debentures are bonds but slightly different than bonds because debentures are not secured like…

Q: How much should I invest today and expect a reimbursement every other month with a ROR of 0.11…

A: An annuity is a stream of equivalent periodic cash flows over a specific period. In this stream,…

Q: Why does the zero-coupon bond pay no interest?

A:

Q: A "discount bond" has a price less than face value because ________________.    A) the issuing firm…

A: Discount Bond - Discount bond is something which is issued below its Par value, but it does not mean…

Q: A premium occurs when the issue price of a bond is above its face amount. True or False True False

A: Bonds are normally issued at a specified interest rate and a period of time either at face value, at…

Q: onvertible bond B. none of these c .non convertible bond + call option d .non convertible…

A: Step 1 Convertible bondholders receive newly issued securities in the form of shares when they…

Q: A AAA-rated bond has a lower yield than a A-rated bond. True O False

A: Bonds are debt instruments issued by companies. Credit rating agencies assign ratings to the bonds…

Q: Investing in bonds is generally less risky than investing in stocks.  True  False

A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…

Q: QUESTION 1 a) Under what conditions that a discount bond has a negative nominal interest rate? Is it…

A: Bonds- A bond is a contract between two parties that specifies the principal amount to be paid at…

Q: Generally speaking, short-term bonds have lower yields than long-term bonds. True False

A: Bonds are financial instruments representing debt obligations issued by various entities, including…

Q: Which of the following statement(s) is/are most likely to be false? The coupon yield is another…

A: Coupon rate or yield is the rate at which a bond pays coupon payments to its holder. Yield is the…

Q: Zero coupon bonds are tally sold at a discount? True or false?

A: In this question, we are required to determine whether zero-coupon bonds are sold at discount or…

Q: If a bond's rating declines, then so does its price, everything else equal. Select one: True False

A: Bond rating : A bond's rating defines its credit quality and directly relates to the cost of the…

Q: Which of the following sentences about bonds’ optional features is true? Explain  A.A borrower will…

A: Bonds are financial instruments that represent a form of debt or borrowing. They are typically…

Q: What type of bond would discourage a frivolous bidder? a. Payment b. Bid c. Labour and material d.…

A: A bond is a type of loan raised by the company for the purpose of financing the assets. The bonds…

Q: Which of the following about bonds is false? OA Higher bond rating indicates higher probability of…

A: A bond is a debt instrument used by companies to raise capital from their investors. The investor…

Q: its) Which of the following pieces of information is NOT necessary to compute the present value of a…

A: The equation required to calculate the present value of bond is given belowPresent value of…

Q: only To begin your savings plan it is a good idea to set aside your savings first and 8hly spend is…

A: Bonds- A bond is a fixed-income instrument that represents a loan made by an investor to a borrower…

Q: If a bond is attractive, it will experience a _____ amount of demand and ultimately sell for a…

A: A bond refers to a financial instrument that represents a loan made by an investor to a borrower,…

Q: B. TRUE OR FALSE. Use the separate answer sheet. 1. If the effective (market) interest rate is less…

A: The objective of the question is to determine the truthfulness of each statement related to various…

Q: A "discount" bond's price is less than it's par value because the coupon rate is less than the yield…

A: When there is a fall in the price of a bond it is said to be selling at a discount to par.A zero…

Q: o coupon bond has more interest rate risk than a comparable coupon bond.    true or false

A: Zero coupon bond do not have any coupon payment and face value is paid on the maturity and in coupon…

Q: Amortization of bond premium decreases interest expense, while amortization of discount increases…

A: The bonds are the financial instruments for the business which are issued by business to raise the…

Q: Over the term of the bonds, the amount of unamortized discount will a. be unaffected until the…

A: Bonds are those note which are traded in the public market and these are sold for more or less than…

Q: 1. Bonds with longer maturities will a. fluctuate less when interest rate change b. fluctuate more…

A: Bonds maturity means the date when face value of bond is repaid back. It is usually defined while…

Q: A derivative security derives its value from another previously issued instrument (a stock or bond).…

A: Derivatives can be used to for hedging or arbitrage purpose.

Q: bond price. A yield to maturity implies a a. lower; lower b. higher; lower c. higher; higher d. None…

A: Bond: An investor and the corporation, government, or government agency that issues the bond form a…

Q: Which of the following statements is false?

A: Sinc as there are multiple questions are given, so as per answering guideline we do only first one.

Q: Explain THREE (3) reasons why zero coupon bonds tend to be more volatile than other types of bonds

A: Zero coupon bonds are the bonds that are issued at deep discount and no coupon rate is paid to the…

Characteristics of Bonds