If an investor is holding the bonds of a corporation, he or she will be concerned about interest rate risk since it affects Blank______. Multiple choice question. the par value of bonds the coupon rates of bonds the time to maturity of bonds the market price of bonds
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If an investor is holding the bonds of a corporation, he or she will be concerned about interest rate risk since it affects Blank______.
the par
the coupon rates of bonds
the time to maturity of bonds
the market price of bonds
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- The time value of money is used in calculating bond prices because: Group of answer choices A - The company might choose to repay the bonds prior to their maturity date B - Bond investors receive future payments and purchase bonds with current dollars C - The amount to be repaid at maturity will change as market rates change D - Cash interest payments to bondholders will change as market rates changeWhat happens to Bond prices, quantities, and interest rates if (Make sure to include the supply and demand graph for bonds for each question : a) Decrease in wealth b) Increase in risk c) Decrease in liquidityIf given the original value (par value) and market price (the price the bond sold for), how do youknow if the bond is being issued at a discount or a premium? 2. As an investor, would you want to buy a bond at a discount or premium? Explain the reasoningbehind your choice. 3. Explain how a company's Income Statement is affected by treasury stock transactions?
- Can you elaborate or explain more.How does one determine the required rate of return of a bond, the cash flows of a bond and the value of a bond? How do you determine if a bond is a good investment? Are long-term bonds riskier than short-term bonds? Explain and Discuss.Which is not considered in bond valuation?a. The required rate of return of the investors which considers all risk factors and opportunity costs.b. The streams of future cash flows that would include the interest and maturity value.c. The maturity or the term of the bond.d. The date of issuance for the bond and the publication for the public offering.e. All of the abovef. None of the above
- Money duration is the appropriate measure of interest rate risk for bonds with embedded options. Select one: True FalseInterest-rate risk results from: Answer a. Bond prices being fixed over the life of the bond b. Inflation being uncertain c. A mismatch between an individual investment horizon and a bond maturity d. The fact that most people hold bonds until they mature1. Types of bonds Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date. A. Which of the following statements about Treasury bonds is the most accurate? Treasury bonds have a very small amount of default risk, so they are not completely riskless. Treasury bonds are completely riskless. Treasury bonds are not completely riskless, since their prices will decline when interest rates rise. B. Based on the information given in the following statement, answer the questions that follow: In July 2009, Hungary successfully issued 1 billion euros in bonds. The transaction was managed by Citigroup. Who is the issuer of the bonds? The Hungarian government Hungary Bank Citigroup C. What type of bonds are these? Municipal bonds Corporate bonds Government bonds
- What is a bond's accrued interest? Multiple choice question. It is the additional interest that a firm must pay if the interest cheques are mailed late. It is the interest that has been received but not yet earned. It is the difference between the bond's coupon rate and the market yield. It is the interest that has been earned but not yet received.If an investor is concerned about interest rate risk, the investor should consider investing in a) Serial bonds. b)Sinking fund bonds. c)Convertible bonds. d) Floating rate bondsWhat is a bond spread and how is it related tothe default risk premium? How are bond ratingsrelated to default risk? What factors affect a company’s bond rating?
