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melomori [17]
3 years ago
9

A bond will sell at a premium when its coupon interest rate: is lower than the market interest rate on similar bonds. equals the

market interest rate on similar bonds. varies more than the market interest rate on similar bonds. exceeds the market interest rate on similar bonds
Business
1 answer:
DiKsa [7]3 years ago
8 0

A bond will sell at premium when its coupon interest rate <u>exceeds the market interest rate on similar bonds.</u>

Explanation:

Premium bonds are the bonds that are trading above par in the market. Further on the bond would trade on premium only when it offers a coupon rate exceeding the market rate that is being offered on similar bonds.

In simple lay man's language, the term premium and discount can be understood to carry a crude definition of high and low demand. When the demand would be high, the bonds would fetch a higher value and vice-versa.

Thus Bonds would highly be valued when it is paying interest that is greater than the interest prevailing in the market contemporarily.

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yaroslaw [1]

Answer:

The public sector includes all sorts of government (central, state, and local). It provides basic goods or services that are either not, or cannot be, provided by the private sector, for example, schools, roads, etc.

Explanation:

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6 0
3 years ago
Margo insists that her dreams frequently enable her to perceive and predict future events. margo is claiming to possess the powe
Alinara [238K]

Margo insists that her dreams frequently enable her to perceive and predict future events. margo is claiming to possess the power of precognition.

The alleged psychic phenomenon known as precognition involves seeing or otherwise becoming immediately aware of future events. Precognition is usually regarded as pseudoscience because there is no acknowledged scientific proof that it has any validity.

Precognitive dreams are frequently explained by coincidence or the law of large numbers. There will occasionally be matches between dream visions and specific future events or imagery given sufficiently many possibilities. Precognition is the supernormal ability to know what will happen in the future, with the focus being on foretelling events rather than mentally influencing them to happen.

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6 0
2 years ago
In access, use the documenter tool to describe the tables in a database.
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4 0
3 years ago
26. Currently, Bruner Inc.'s bonds sell for $1,250. They pay a $120 annual coupon, have a 15-year maturity, and a $1,000 par val
maksim [4K]

Answer:

2.11%

Explanation:

From the information given; we use the Excel spreadsheet to compute the  difference between this bond's YTM(Yield to maturity) and its YTC(Yield to call).

From the diagram; we will see that the

YTM(Yield to maturity) = 8.91%

YTC(Yield to call).= 6.81%

Therefore the difference between this bond's YTM and its YTC = (8.91 - 6.81)%

the difference between this bond's YTM and its YTC = 2.11%

7 0
3 years ago
a. What is the price​ (expressed as a percentage of the face​ value) of a​ one-year, zero-coupon corporate bond with a AAA​ rati
VikaD [51]

Answer and Explanation:

a. The computation of price (expressed as a percentage of the face​ value) is shown below:-

Price = Face value ÷ (1 + Yield to maturity)^Number of the compounding period

= $1,000 ÷ (1 + 0.0323)^1

= $1,000 ÷ 1.0323

= $968.71

Price expected as a percentage to a face value = Price ÷ Face value × 100

= $968.71 ÷ $1,000 × 100

= 96.87%

b. The computation of credit spread of AAA-rated corporate​ bonds is shown below:-

Credit spread = Yield of AAA-rated corporate bond - Yield of treasury bond

= 3.23% - 3.15%

= 0.08%

c. The computation of credit spread on B-rated corporate bonds is shown below:-

Credit spread = Yield of B-rated corporate bond - Yeld of treasury bond

= 4.94% - 3.15%

= 1.79%

d. The credit rating for a bond changes with its respective credit risk change. That implies the bond 's rating would be lower the lower risk, and likewise.  

The investor is demanding higher returns on risky bonds for additional risk-taking. Hence the credit spread is widening as the rating of bonds falls with an increase in the risk.

8 0
3 years ago
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