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nlexa [21]
4 years ago
8

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 coupo

n rate
Business
1 answer:
Elden [556K]4 years ago
8 0

Answer:

The answer is 'The price of the bond will increase'

Explanation:

Bond and its price are indirectly related i.e If one goes up, the other goes down. What this means is that, if the yield of the bond is lower than coupon rate(coupon rate greater than bond yield), the price of the bond will increase. And also if the yield of the bond is higher than coupon rate(coupon rate lower than bond yield), the price of the bond will decrease.

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Atlantis Fisheries issues zero coupon bonds on the market at a price of $455 per bond. If these bonds are callable in 5 years at
igomit [66]

Answer:

The yield to call is 2.24%.

Explanation:

To calculate the yield to call, you can use the following formula:

YTC = (C + (CP - P) / t) / ((CP + P) / 2)

YTC= Yield to call

C= Annual Coupon: 0

CP= Call price of the bond: $509

P= Price of the bond: $455

t= time remaining until call date: 5

YTC= (0+(509-455)/5)/((509+455)/2)

YTC=(54/5)/(964/2)

YTC= 10.8/482

YTC= 0.0224= 2.24%

3 0
3 years ago
Read 2 more answers
Tryon Corp. and Sandoval, Inc. were joint owners of the former Sandy Glass manufacturing facility. An environmental assessment f
kotegsom [21]

Answer:

One company pays 100%, the other re-reimburses 50%  

Explanation:

If an environmental assessment found that the two companies share joint and several liability for a hazardous materials cleanup.

What could happen if the two of them don't agree to cooperate in the cleanup is that one of the companies will eventually settle the costs fully while the other party will have to reimburse the party that pays, 50%.

The paying company could make claims because the environmental impact assessment has already found both companies jointly liable. hence each company ought to jointly share the costs

4 0
3 years ago
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For something to have value, it must _____________.
AnnyKZ [126]

Answer: have utility..

Explanation: in order for anything to have worth you must br able to use it and it must work properly

7 0
3 years ago
In order for a person to recognize needs that are not being met and make a career out of fulfilling unmet needs, that person mus
fgiga [73]

Answer:

sight and foresight

4 0
4 years ago
Describe the typical costs of a retiree. HURRY!!!!!! HURRY!!!!!HURRY!!!!!!!!
djverab [1.8K]
Hello there,

A typical cost of a retirement would be the following:

Perhaps the "Car of the year".

Smaller House/Smaller apartment.

Hope this helps.

~Jurgen


3 0
4 years ago
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