The rate of return earned on a bond if it is held until maturity is its: Group of answ
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A: i= (Face Value-Discount price)/ Discount price or i = (Face value− Price)/Price
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A:
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Q: What is the difference between the yield to maturity of a bond and the realized yield?
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Q: Explain how you would calculate the Expected Yield of a bond in both a one period and multiple…
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2
The
Group of answer choices
sinking fund yield.
yield-to-maturity.
coupon payment.
yield-to-call.
Step by step
Solved in 2 steps
- Which of the following statements is/are most CORRECT? O 11 A yield curve depicts the relationship between bond's 'time to maturity and its yield to maturity. 2) A premium bond's price will decline over time if the required return remains unchanged. 3) A discount bond's price will decline over time if the required return remains unchanged. 4) Both a and b are correct.a) All things being equal If a bond's coupon rate is higher than its yieldto maturity (YTM), is the bond selling at a discount, premium or par?b) All things being equal If a bond's coupon rate is lower than its yield tomaturity (YTM), is the bond selling at a discount, premium or par?c) All things being equal If a bond's coupon rate is equal to its yield tomaturity (YTM), then is the bond selling at a discount, premium or par?d) All else being equal, the longer the term to maturity, the greater orthe lower the duration?f) All else being equal, the higher the coupon rate on the bond, theshorter or the longer the duration of the bond?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.
- How do bond duration and bond convexity work together to assess the interest rate risk of a bond portfolio?12. The rate of interest actually earned by bondholders is called the a. stated rate. b. coupon rate. c. bond rate. d. effective rate.With regard to interest rate sensitivity measures and bonds: Group of answer choices C. Convexity attempts to capture the sensitivity of a bond’s duration to changes in interest rates. D. Both B & C B. Duration is related to yield approximation and convexity is related to price. A. Convexity is related to yield approximation and duration is related to price
- D3) Show that a variable rate bond is priced at par if the coupons are paid with reference to the rate curve with which the flows are discounted.If interest rates increase after a bond issue, the yield-to-maturity will ______,A bond’s expected return is sometimes estimated by its yield to maturity (YTM) and sometimes by its yield to call (YTC). The YTC is a better estimate when the bond sells at... a. a discount. b. a premium. c. par value.
- If a bond's yield to maturity increases, then what happens to current yield? Group of answer choices Not enough information No change Decrease IncreaseCurrent yield is used to determine Seleccione una: a. A portion of the yield on an investment b. The payout of a bond investment c. The amount of money a bond investor will earn d. The coupon rate of a bond investmentWhich factors could explain the higher yield to maturity on the Hunter bond? Check all that apply: Bond rating Original time to maturity Coupon rate Time to maturity Issue size