Question
Please help me with these 3 Economic Questions below: Correct Answers Of Course! Thank you! A corporation issues a two-year bond with a coupon of
Please help me with these 3 Economic Questions below:
Correct Answers Of Course!
Thank you!
A corporation issues a two-year bond with a coupon of $50 and a face value of $1,000. A year later, market interest rates have declined to 4%. What is the price of the bond a year after it was issued?
A. $1,018.86
B. $1,025.00
C. $1,000.00
D. $1,009.62
If, while you are holding a coupon bond, its market price rises, you can be sure that
A. the par value of the bond must have declined.
B. the interest rate on other similar bonds must have risen.
C. the coupon payment you are receiving must have been reduced.
D. the interest rate on other similar bonds must have fallen.
Which of the following $1,000 face-value securities has theHIGHESTyield to maturity?
A. A 6 percent coupon bond selling for $1,000.
B. A 10 percent coupon bond selling for $1,200.
C. A 10 percent coupon bond selling for $1,000.
D. A 5 percent coupon bond selling for $1,000.
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