Question
Please solve the following 1). Which one of the following bond values will change when interest rates change? A. The expected cash flows B. The
Please solve the following
1).
Which one of the following bond values will change when interest rates change?
| A. | The expected cash flows | ||
| B. | The present value | ||
| C. |
| ||
| D. | The maturity value
|
What is the yield to maturity for a bond paying $100 annually that has 6 years until maturity and sells for $1,000?
| A. | 6.0% | |
| B. | 8.5% | |
| C. | 10.0% | |
| D. | 12.5%
|
Assume a bond is currently selling at par value. What will happen in the future if the yield on the bond is lower than the coupon rate?
| A. | The price of the bond will increase | |
| B. | The coupon rate of the bond will increase | |
| C. | The par value of the bond will decrease | |
| D. | The coupon payments will be adjusted to the new discount rate |
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Money, Banking And Financial Markets
Authors: Stephen G. Cecchetti, Kermit L. Schoenholtz
3rd Global Edition
1259071197, 9781259071195
