what happens when a bond becomes due?
Finance-Everfi module: what happens when a bond becomes due?
A
You pay it back to the issuer, minus interest.
B
The issuer will pay you back, plus interest.
C
You pay it back to the issuer, plus interest.
D
The issuer will pay you back, minus interest.
Homework Answers
The answer is B: The issuer will pay you back, plus interest.
answer is: B The issuer will pay you back, plus interest. Prior to the purchase of the bond, the bond issuer will specify the interest rates of the bonds and the maturity dates of the bond.The bond itself can be sold to another persons, but the interest revenue would not be paid by the issuer before the maturity date.When you finally enter the maturity date, the issuer of the bond would pay back the amount of money on the bond plus interests to the last legal holder of the bond.
What happens to each of the following (increase or decrease) if investment becomes more desirable at...
What happens to each of the following (increase or decrease) if investment becomes more desirable at each interest rate? A. Interest Rate B. Net capital outflow C. The exchange rate
What happens to the price of a three-year bond with an 8% coupon when interest rates...
What happens to the price of a three-year bond with an 8% coupon when interest rates change from 8% to 5%?
10. A callable corporate bond can be purchased by the bond issuer before maturity for a...
10. A callable corporate bond can be purchased by the bond issuer before maturity for a price specified at the time the bond is issued. Corporation X issues two bonds (bond A and bond B) at the same time with the same maturity, par value, and coupons. However, bond A is callable and bond B is not. Which bond will sell for a higher price and why? (a) Bond B; bond A should have the value of bond B minus...
H19 X fx ESEF 1 Given the following... Show in excel what happens when the bond...
H19 X fx ESEF 1 Given the following... Show in excel what happens when the bond is sold at par value. 2 Face Value $2,000 3 Yearly Interest Rate 10% 4 Coupon Rate 5% 5 Frequency of Payments Semi-Annual 6 Payments/year 7 Number of Payments 8 Maturity Date 1-Jul-50 9 a. Show how the order of YTM, Coupon rate and Current Yield changes when the bond is sold at a discount. 10 b. Show how the order of YTM, Coupon...
1. What happens to the marginal cost curve when the marginal product of labor is rising?...
1. What happens to the marginal cost curve when the marginal product of labor is rising? A) It becomes vertical. B) It falls. C) It rises. D) It becomes horizontal. 2. The payment of wages by a firm is an example of: A) a long-run cost of production. B) an explicit cost of production. C) an irreversible cost of production. D) an implicit cost of production.
What happens to the price of a three-year bond with an 8% coupon when interest rates...
What happens to the price of a three-year bond with an 8% coupon when interest rates change from 8% to 5%? A price increase of $71.54 A price decrease of $71.54 A price increase of $81.70 A price decrease of $81.70
The Fed sells a bond to a bank. Other things the same 10. what happens to...
The Fed sells a bond to a bank. Other things the same 10. what happens to the Fed’s holdings of securities? 11. if the bank transfers funds for its deposits at the Fed to pay the Fed for the bond, what happens to the banks reserves? 12. overall what happens to the bank’s assets? Please help me with these. Thank you! I will rate. 13. overall what happens to the Fed’s assets? 14. overall what happens to the Fed’s liabilities?...
11) When discussing bonds, convexity relates to the ________. A. shape of the bond price curve...
11) When discussing bonds, convexity relates to the ________. A. shape of the bond price curve B. shape of the yield curve C. slope of the yield curve D. shape of the bond dealer 12) A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000. If the bond matures in 16 years, it should sell for a price of __________ today. A. $458.00 B. $641.00 C. $789.00 D. $1,100.00 13) The yield-to-maturity (YTM) on...
1. If the interest rate rises, what happens to prices? What happens if a rating agency...
1. If the interest rate rises, what happens to prices? What happens if a rating agency downgrades a bond? 2. Suppose a firm experiences worse than expected sales, and moves closer to defaulting on its interest payments to bondholders. What will happen to the term structure of interest rates? 3. Suppose a firm issues 2 identical bonds, C and D, except that bond C is callable and is junior debt, whereas bond D is not callable and is senior debt....
1. What happens at the level of molecules, when a solid becomes a liquid? 2. Why...
1. What happens at the level of molecules, when a solid becomes a liquid? 2. Why do some parts of the crystals melt before the whole crystal or some other crystals? 3. Look up the melting points (in C) of the following species and include the reference. Benzoic acid Reference Fructose Reference Ascorbic acid Reference 4. Stable solids have strong bonds between molecules. Of the three compounds melted benzoic acid, fructose, and ascorbic acid-rank them from weakest bonds to strongest...
10. A callable corporate bond can be purchased by the bond issuer before maturity for a price specified at the time the bond is issued. Corporation X issues two bonds (bond A and bond B) at the same time with the same maturity, par value, and coupons. However, bond A is callable and bond B is not. Which bond will sell for a higher price and why? (a) Bond B; bond A should have the value of bond B minus...
H19 X fx ESEF 1 Given the following... Show in excel what happens when the bond is sold at par value. 2 Face Value $2,000 3 Yearly Interest Rate 10% 4 Coupon Rate 5% 5 Frequency of Payments Semi-Annual 6 Payments/year 7 Number of Payments 8 Maturity Date 1-Jul-50 9 a. Show how the order of YTM, Coupon rate and Current Yield changes when the bond is sold at a discount. 10 b. Show how the order of YTM, Coupon...
1. What happens at the level of molecules, when a solid becomes a liquid? 2. Why do some parts of the crystals melt before the whole crystal or some other crystals? 3. Look up the melting points (in C) of the following species and include the reference. Benzoic acid Reference Fructose Reference Ascorbic acid Reference 4. Stable solids have strong bonds between molecules. Of the three compounds melted benzoic acid, fructose, and ascorbic acid-rank them from weakest bonds to strongest...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago