All categories

2 years ago

If the effective annual yield on a bond is equal to the bondʹs coupon rate, the bond will have a market value that is

1 answer:

5 0

If the effective annual yield on a bond is equal to the bondʹs coupon rate, the bond will have a market value that is equal to the principal value of the bond. Option B. This is further explained below.

Generally, a Bond is simply defined as fixed-income investments such as bonds that reflect a loan from an investor to a borrower, often a corporation or the government.

In conclusion, In this case, the bond's market value will be equal to the principal value of the bond. if the bond's effective yearly yield is equal to the bond's coupon rate

You might be interested in

In the long run, an increase in the money supply will affect the price level and real GDP of an economy in which of the followin

Mars2501 [29]

Answer:

1. Lower the interest rates in the economy.

2. Increase asset prices

Explanation:

Remember, increase in money supply looks at the total money made available in circulation in an economy. Alternatively it is called liquidation.

The real of an economy takes into consideration the impact of inflation on the value of goods and services produced in an economy.

Therefore lower interest rates as a result of increase in money supply would results in more consumption and borrowing.

While the price of houses, stocks would rise because of the increased money supply.

4 0

3 years ago

A check-processing center uses exponential smoothing to forecast the number of incoming checks each month. The number of checks

aliina [53]

Answer:

A. Forecast for July = 42.

B. Forecast for August = 42.45

C. Because of seasonality in the banking industry.

Explanation:

A. Forecast for July = Forecast for June + Smoothing constant x (Forecasting error)

= 42 + 0.15 (42-42) = 42

B. Forecast for August = Forecast for July + 0.15 (Forecasting error)

= 42 + 0.15 (45-42) = 42.45

C. Because there is a great deal of seasonality in the processing requirements of banking industry, this forecasting method (exponential smoothing) might not be appropriate for this situation.

5 0

3 years ago

The exercise price of the options is $100 per share, all options are European and the stock does not pay any dividend. The call

Ber [7]

Answer:

Stock Price is $98.70

Explanation:

given data

exercise price = $100 per share

call price = $25 per share

put price = $17 per share

mature time = 2 years

annual rate of interest = 5%

to find out

What is the stock price today

solution

we will use here Put Call Parity for find out Stock Price that is express as

C + $\frac{100}{(1+r)^t}$ = S + P .....................1

here C is call price and r is rate and t is time and S is Stock Price and P is put price so put all value in equation 1

C + $\frac{100}{(1+r)^t}$ = S + P

25 + $\frac{100}{(1+0.5)^2}$ = S + 17

solve it we get

P = $98.70

so Stock Price is $98.70

6 0

3 years ago

What is generally TRUE about earning an income?

Daniel [21]

I think it could possibly be d?

5 0

2 years ago

Read 2 more answers

the government believes that the equilibrium price is too low and tries to help almond growers by settinga price floor at Pf. Wh

musickatia [10]

Answer: D) B

Explanation:

The Producer Surplus refers to the area below the Price Floor but above the Supply Curve and left of the new Quantity supplied. It comprises of areas B and E.

Before the Price Floor was introduced, area A, B and C were the Consumer Surplus as they were above the price but below the Demand Curve.

After the Price Floor was introduced however, area B has become a Producer Surplus.

7 0

4 years ago