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posledela
3 years ago
7

Two 20-year corporate bonds are issued at par, with stated interest rates of 10%. One issue is puttable at par in 5 years, while

the other is puttable at par in 10 years. If interest rates rise by 200 basis points shortly after issuance, which statement is TRUE
Business
1 answer:
VMariaS [17]3 years ago
6 0

Answer:

The answer is "The 10 year-long bond will depreciate more than just in the 5-year bond".

Explanation:

Some of the information is missing in the question. so, the correct answer can be described as follows:

  • Where a bond will fall around par throughout the near future, that buyer would be unable to return the bond to an issuer long as the money declines as a result of rising bond yields.  
  • This bond is set in place in ten years will, therefore, depreciate more than a 5-year bond if interest rates rise, that's why the 10 year-long bonds will depreciate more than in the 5-year bond.
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Assume the bid rate of an Australian dollar is $0.60 while the ask rate is $0.61 at Bank Q. Assume the bid rate of an Australian
jarptica [38.1K]

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$16,393.44

Explanation:

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3 years ago
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4 0
3 years ago
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.6 percent, a YTM of 7.6 percent, and has 13
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3 0
3 years ago
A stability strategy is a grand strategy that involves little or no significant organizational change. For example, Love Forever
zloy xaker [14]

Answer:

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Explanation:

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4 0
3 years ago
Read 2 more answers
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