Question
Do all parts please asap. Thank you so much for being the best ever Part 1 Which of the following statements on bond yield is
Do all parts please asap. Thank you so much for being the best ever
Part 1
Which of the following statements on bond yield is true?
Yield-to-maturity is the net present value of all cash flows from the bond.
When looking at yields for callable bonds, we calculate the current yield instead of yield-to-maturity.
The investor does not need to reinvest the coupons to realize the estimated yield-to-maturity.
The yield of a bond may include interest payments, capital gain and income from reinvesting the coupons.
Part 2
Which of the following statements best describes a yield curve?
A graph showing the change of yield of a bond in the economic cycle
A graph showing yields of bonds from the same issuer with differing maturities
A graph showing the relationship between the bonds yield and its price
A graph showing the yields of bonds with different credit ratings
Part 3
Whats the current yield of the bond based on the information below?
- Par value: $100
- Coupon rate: 6%, paid semi-annually
- Current price: $104.00
- Number of years to maturity: 5
- Yield to maturity: 5%
4.81%
5.26%
2.88%
5.77%
Part 4
Which of the following might cause the yield curve to steepen?
The market pricing in future interest rate rises.
Excess demand by pension funds for long-dated assets.
Central banks raising interest rates.
Concerns that the economy may soon go into recession.
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