The contract interest rates and market interest rates of bonds is sometimes different. Why? The market interest rates of corporate bonds are locked in for the term of the bond maturity. Investors want the best rate so bond issuers frequently change their contact rate. There is a lag between the time a corporation decides to issue bonds and the time the bonds are actually issued to the market. The Federal Reserve Bank (FRB) decides that the bond contract rate is out of compliance for similar risk categories. please give me the correct answer with correct letter and explain why

The contract interest rates and market interest rates of bonds is sometimes different. Why? The market interest rates of corporate bonds are locked in for the term of the bond maturity. Investors want the best rate so bond issuers frequently change their contact rate. There is a lag between the time a corporation decides to issue bonds and the time the bonds are actually issued to the market. The Federal Reserve Bank (FRB) decides that the bond contract rate is out of compliance for similar risk categories. please give me the correct answer with correct letter and explain why

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 change
The values of Treasury bonds can change widely with changes in interest rates. True False
The company's bank won't lend it any more money than it already has, and investment bankers have said that debentures are out of the question. The treasurer has asked you to do some research and suggest a few ways in which bonds might be made attractive enough to allow Flyover to borrow.
Which of the following is not an effect of a call provision? A. Issuer can refund the bond issue if rates decline. B. Requires the issuer to pay off the loan over its life rather than all at maturity. C. Bond investors require higher yields on callable bonds D. Upon calling bonds the issuer must pay call premium to bond holder E. All of the above are effects of a call provision
These are all types of corporate bonds: Junk, convertible, and period bonds. Convertible, putable, and zero-coupon bonds. Convertible, callable, and municipal bonds. Callable, straight, and private bonds. The contract, or stated interest rate of a bond is: The rate at which the issuer is paying interest on the bond. The face value of the bond. The interest rate adjusted for the Feds latest prime rate. The interest rate the borrower is willing to accept. please give me one answer correct answer and explain for both with correct choice
Explain why company managers might choose to issue zero-coupon bonds instead of interest-bearing bonds or coupon bonds instead of zero- coupon bonds? Give pros and cons of each. Be sure to consider the situation from the bond issuer's viewpoint and not the bondholder.
Investment Banks operate and earn profits by: a) Purchasing undervalued securities on the market b) Creating and marketing new financial securities for issuers. c) Underwriting existing security issues, and selling them at a discount. d) Issuing stocks and bonds based on their own credit. e) Purchasing and reselling existing undervalued stocks and bonds. f) None of the other answers.
Which of the following events would make it less likely that a company would choose to call its outstanding callable bonds? O The company's financial situation improves significantly. O Ratings on the company's bonds are upgraded. O Inflation decreases significantly. Market interest rates decline sharply. O Market interest rates rise sharply.