The yield to maturity on a bond a is fixed in the indenture. b is lower for higher-risk bonds. c is the required return on the bond. d is generally equal to the coupon interest rate.
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The yield to maturity on a bond
a
is fixed in the indenture.
b
is lower for higher-risk bonds.
c
is the required return on the bond.
d
is generally equal to the coupon interest rate.
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- The yield to maturity on bonds is usually the same as a. yield to call. b. current yield. c. the market rate of interest. d. the coupon rate of interest.For a discount bond, the current yield isthe yield to maturity, and the coupon rate is the yield to maturity. Select one: O a. less than; less than O b. equal to; equal to O c less than; greater than O d. greater than; greater than O e. greater than; less thanA 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.
- The method used to value a default-free zero coupon bonds (such as T-bills) requires that the interest is deducted from the face value of the bonds in advance. a.rediscounting b.market price c.forward price d.discount interestwhich of the below does not qualify a bond ? a. Time to maturity b. Par Value c. Coupon rate d. Yield to Maturity e. Current yieldA bond's real rate of return is reflected by the bond's 1). YTM 2). Coupon Rate 3). Par Value 4). Selling Price 5). Redemption Value
- a bonds interest rate risk is lower if the bond has a _____ maturity and a ____ coupon rateThe formula (Coupon Payment / Current bond price) calculates the _______. Multiple Choice Current yield. Risk-free rate. Coupon rate. Yield to maturity Bond premium.2. For cach of the following situation, identify whether a bond would be considered a premium bond, a discounted bond, or a par bond. a. A bond's current market price is greater than its face value. b. A bond's coupon rate is equal to its yield to maturity. c. A bond's coupon rate is less than its required rate of return. d. A bond's coupon rate is less than its yield to maturity. e. A bond's coupon rate is greater than its yield to maturity. f. A bond's fair present value is less than its face value. Answer: a. ..... b. с. d. e. f.
- Which of the following measures the interest rate risk of a bond in dollars and cents? O Price Value of a Basis Point O Convexity O Modified Duration Duration.he interest rate used to calculate the present value of a bond's cash flows is often referred to as the:Group of answer choices dividend rate. discount rate. multiplier. yield to maturityInterest Rate risk depends upon how sensitive the bond price is to interest rate changes (i.e., maturity and coupon rate). T/F