Liquid yield option notes or LYONS have which of the following characteristics? I. convertibility at a fixed conversion ratio II. high coupon rates III. a put feature that guarantees the right to redeem the bonds at a prespecified price IV. convertibility at a fixed conversion price I and III only II and IV only I and IV only II and III only

Liquid yield option notes or LYONS have which of the following characteristics? I. convertibility at a fixed conversion ratio II. high coupon rates III. a put feature that guarantees the right to redeem the bonds at a prespecified price IV. convertibility at a fixed conversion price I and III only II and IV only I and IV only II and III only

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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All of the following are credit derivatives except: Group of answer choices C. Spread options D. Credit-linked notes B. Credit default swaps (CDS) A. Remics
All else the same, a will decrease the required return on a bond. Select one: O a. sinking fund O b. increase in the size of a bond issuance O c. lower bond rating O d. call provision O e. increase in inflation
How does the price-yield relationship for a callable bond compare to the same relationship for an option-free bond? The price-yield relationship is best described as exhibiting: negative convexity at low yields for the callable bond and positive convexity for the option-free bond the same convexity for both bond types negative convexity for the callable bond and positive convexity for an option- free bond
Give typing answer with explanation and conclusion Question 16: Which of the following statements about convexity are true? I. Convexity accounts for the curvilinear function of bond rates II. A bond with a very low coupon and a long maturity will have low convexity III. A bond investor would seek to avoid bonds with high convexity. IV. Convexity is defined as the rate of change of the slope of the price/yield curve V. There is an inverse relationship between maturity and convexity a. I. b. II. III. IV. c. I. IV. d. II. IV. V. e. I. II. IV. V.
1.If the coupon rate is less than the market rate, the bond will be a: Group of answer choices A. premium bond B. discount bond C. at par bond 2.If the coupon rate is greater than the market rate, the bond will be a: A. premium bond B. discount bond C. at par bond 3. If the price of the bond is greater than the par value, then the bond is a: A. premium bond B. discount bond C. at par bond 4.Company X is issuing bonds. They plan to issue 10,000, $1000 par, 7% bonds that pay semi-annual for 5 years. If the price per bond is $1020, what is the market annual rate-of-return? (percentage, 2 decimals, e.g. xx.xx)
Give Correct Answer with explanation and also provide explanation of Correct and incorrect option
Duration Multiple Choice is a direct comparison between bond issues with different levels of risk. assesses the time element of bonds in terms of both coupon and term to maturity and is a direct comparison between bond issues with different levels of risk. assesses the time element of bonds in terms of both coupon and term to maturity and allows structuring a portfolio to avoid interest-rate risk. assesses the time element of bonds in terms of both coupon and term to maturity. allows structuring a portfolio to avoid interest-rate risk.
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 W

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