Question
If a bond is selling at a DISCOUNT and the yield to maturity (YTM) on the bond stays constant for the bonds life, then the
If a bond is selling at a DISCOUNT and the yield to maturity (YTM) on the bond stays constant for the bonds life, then the bonds price will _____________
A. remain at par for the bonds life
B. fall during the bonds life
C. rise during the bonds life
Based on the Expectations Hypothesis of the term structure of interest rates, if the slope of the term structure increases, this is most likely because
A. investors as a whole anticipate higher interest rates in future
B. Long-term bonds have become more liquid
C. some investors have become more risk-averse while other investors have become less risk-averse
D. investors as a whole anticipate lower interest rates in the future
If the YTM stays constant, the one period Current Yield and the one period Expected Capital Gains/Loss on the bond add-up to the bonds _____________
A. current price
B. par value
C. coupon rate
D. yield to maturity
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