Which the the following statements space true about bonds: (more 보다 one might be true)A. They room equity instrumentsB. They room debt instrumentsC. They room debt obligations with maturities longer than 7 (or 10) yearsD. They room issued by the commonwealth government, state and local, and public corporations.E. Nobody of the above
B. They are debt instrumentsD. They are issued by the commonwealth government, state and local, and also public corporations.

You are watching: Which of the following statements is true about bonds


True or False: shortcut prices vary inversely with transforms in attention rates: together interest rates rise, bond price fall and as interest rates fall, bond price rise.
Which of the adhering to is true:A. If a link is riskier than other bonds (all other things organized constant), investors will demand greater rates of return and this will result in a lower bond price.B. If a link is much less risky than various other bonds (all other things held constant), investors will demand greater rates that return and this will an outcome in a lower bond price.C. The discount rate on a bond is the required rate the return demanded by the investorD. The sector value of a link is equal to the discounted cash flows the the bond will pay to the investor end the life that the bond.E. Many bonds are initially sold in ~ Par value.
A. If a link is riskier than other bonds (all other things hosted constant), investors will demand greater rates that return and also this will result in a lower bond price.
Which the the following are true about Zero coupon bond (more than one might be true):A. A zero coupon shortcut pays attention each periodB. The sector value of a zero coupon link is simply the discounted value of the last par value payment.C. Zero coupon bonds are issued in ~ par value.D. Zero coupon bonds room issued at below par valueE. Zero coupon bonds are issued in ~ a premium end par value.
B. The market value the a zero coupon shortcut is just the discounted value of the last par worth payment.D. Zero coupon bonds are issued at listed below par value
Which statement(s) room true about about bonds?A. Most residential bonds in the U.S. Pay yearly coupon interest paymentsB. Most domestic bonds in the U.S. Salary semi-annual coupon attention paymentsC. Bonds selling at a discount indigenous Par have actually prices above par value.D. Bonds offering at a premium end Par have prices below par value.E. Bonds offering at a discount from Par have actually prices below par value.F. Bonds offering at a premium over Par have actually prices above par value.
B. Most residential bonds in the U.S. Salary semi-annual coupon interest paymentsE. Bonds offering at a discount from Par have actually prices below par value.F. Bonds selling at a premium end Par have actually prices above par value.
Which that the statement(s) room true about bonds?A. If existing market prices are better than a bond"s coupon rate, the shortcut is offering at a premium.B. If present market prices are higher than a bond"s coupon rate, the link is marketing at a discount.C. If current market prices are less than a bond"s coupon rate, the link is marketing at a premium.D. If current market rates are much less than a bond"s coupon rate, the bond is offering at a discount.
B. If current market rates are greater than a bond"s coupon rate, the link is offering at a discount.C. If current market rates are much less than a bond"s coupon rate, the bond is selling at a premium.
True or False: Zero coupon bonds and also "original worry deep discount" bonds space not marketed at par once issued.
True or False: Bonds that were originally issued in ~ par however are currently selling in ~ a discount from par space priced that method because interest rates have actually risen in the market since the time that the initial issue.
True or False: Bonds that were initially issued in ~ par yet are now selling at a premium native par are priced that means because attention rates have actually risen in the market due to the fact that the time that the initial issue.
True or False: If you build a link portfolio, the portfolio"s duration will equal the weighted median of every the durations of every the bonds included in that portfolio.

See more: 7 To The Power Of -2 - What Is 7 To The Power Of 2


True or False: If you set the term of the asset next of the balance paper of a bank equal come the expression of the liability next of the bank"s balance sheet, friend can safeguard the bank against interest price risk.
True or False: If the duration of the asset side of the balance sheet is better than the duration of the liability side of the balance sheet, it is claimed to it is in liability sensitive to interest rate risk
If you salary $925 for a $1,000 par worth bond that has a coupon rate of 7%, pays semi-annual interest payments, and has 18 year to go till maturity, what is your annual (effective) yield to maturity?
If you pay $925 for a $1,000 par value bond that has actually a coupon price of 7%, payment semi-annual attention payments, and has 18 year to go till maturity, what is your annual (nominal) yield to maturity?
A 20 year link with annual interest payments has actually a coupon rate of 5% and a $1,000 par value. What is the value of the bond to an investor who demands a 4% annual rate of return?
A 20 year bond with annual interest payments has actually a coupon price of 5% and a $1,000 par value. What is the worth of the bond to an investors who demands a 6% annual rate of return?
A 20 year bond through semi-annual interest payments has actually a coupon price of 5% and also a $1,000 par value. What is the worth of the bond come an investors who requirements a 4% yearly rate the return?
A 20 year bond v semi-annual interest payments has a coupon rate of 5% and also a $1,000 par value. What is the value of the bond come an investor who needs a 6% yearly rate that return?
If you salary $825 for a $1,000 par worth bond that has actually a coupon price of 7%, pays semi-annual attention payments, and also has 18 year to go till maturity, what is your yearly nominal yield to maturity? (be certain to calculate the annual nominal yield)
If you salary $825 for a $1,000 par value bond that has actually a coupon rate of 7%, pays semi-annual attention payments, and also has 18 year to go until maturity, what is your yearly effective yield to maturity? (be certain to calculate the effective annual yield)
If the term of a portfolio is 8.25 and also interest prices decrease indigenous 9% come 8.5%, what execute you think will occur to the sector value the the portfolio?A. Boost by 3.7844%B. To decrease by 3.7844%C. Boost by 0.5%D. To decrease by 0.5%E. Boost by 3.80184%F. Rise by 3.80184%
})}else;window.location.assign("https://chrischona2015.org/explanations/textbook-solutions/krugmans-economics-for-ap-2nd-edition-9781464122187");">
*

})}else;window.location.assign("https://chrischona2015.org/explanations/textbook-solutions/foundations-of-microeconomics-7th-edition-9780133477108");">
*

})}else;window.location.assign("https://chrischona2015.org/explanations/textbook-solutions/essentials-of-investments-10th-edition-9780077835422");">
*

})}else;window.location.assign("https://chrischona2015.org/explanations/textbook-solutions/essentials-of-investments-with-sp-bind-in-card-irwinmcgraw-hill-series-in-finance-7th-edition-9780073368719");">
*

Essentials of Investments with S&P bind-in card (Irwin/McGraw-Hill collection in Finance)7th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
window.chrischona2015.org<"productClickLinkData"> = <"name":"Chapter 18: bond Basics","id":"80907464","price":"","category":"premium content","variant":"study guide","position":"","brand":"stephiemelton">; QLoad("chrischona2015.org.productClickLinkData"); return;})}elsewindow.chrischona2015.org<"productClickLinkData"> = <"name":"Chapter 18: shortcut Basics","id":"80907464","price":"","category":"premium content","variant":"study guide","position":"","brand":"stephiemelton">; QLoad("chrischona2015.org.productClickLinkData"); return;;window.location.assign("https://chrischona2015.org/80907464/chapter-18-bond-basics-flash-cards/");" id="1-80907464">