Question
Greetings , this is not a test question. I am just writing a very brief explanation that will provide a little more detail on the
Greetings , this is not a test question. I am just writing a very brief explanation that will provide a little more detail on the following. Thanks
The Value of Bonds is affected by three elements: 1.The amount and timing of the asset's expected cash flows 2.The riskiness of these cash flows 3. The investor's required rate of return for undertaking the investment.
In looking at #1, and "Amount", are they talking about the amount of the issuers cash flows, or amount of the bond? As for "Timing", timing of what?
In looking at #2 I assume their talking about risk as in current market conditions as well as the issuers credit worthiness? Is this correct
In looking at #3, I assume this simply means very simply the return rate an investor would require before agreeing to the investment.
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