1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ludmilkaskok [199]
3 years ago
10

Compare the yield to maturity and the current yield. How do you explain this​ relationship?  ​(Select the best​ response.)A.If a

bond sells at a​ discount, the yield to maturity is greater than the current yield.B.If a bond sells for its par​ value, the yield to maturity is greater than the current yield.C.If a bond sells at a​ premium, the yield to maturity is greater than the current yield.D.There is no certain relationship between the yield to maturity and the current yield.
Business
1 answer:
mamaluj [8]3 years ago
7 0

Answer:

A - If a bond sells at a​ discount, the yield to maturity is greater than the current yield

Explanation:

Yield to maturity is the expected return if the bond is held till maturity. Current yiled is the return if the bond is sold today. There is an evident relationship between yield to maturity (TYM) and the current yield.  

“When a bond's market price is above par, which is known as a premium bond, its current yield and YTM are lower than its coupon rate. Conversely, when a bond sells for less than par, which is known as a discount bond, its current yield and YTM are higher than the coupon rate. Only on occasions when a bond sells for its exact par value are all three rates identical” (Bloomenthal, 2020).

According to the above statements, options C, B and D are eliminated. This leaves option A (If a bond sells at a discount, the yield to maturity is greater than the current yield) as the correct answer. This is true because YTM is calculated on purchase price rather than par value, if the purchase price is less than par value, the YTM will be greater than the current yield.  

You might be interested in
payment history and total debt, together, comprise of 65% of your score. why do you think it’s so high?
Otrada [13]

<u>Solution and Explanation:</u>

Most money related specialists characterize a terrible FICO rating as anything beneath a 600, however, every loan specialist has its own principles while checking on applications. The normal American has a FICO assessment of 687, which helps put the range into viewpoint.  

In the event that you have poor credit, you've presumably had a blend of negative things on your credit report, as missed installments, misconducts, or possibly a chapter 11 or dispossession. You can generally demand a free credit report to make sense of what precisely is keeping your score so low. Truth be told, we prescribe checking your credit report each year.  

Government law permits you access to a free duplicate of every one of your three reports like clockwork, so there's no explanation not to exploit this advantage.

6 0
3 years ago
What do we ignore when we measure GDP?
Dovator [93]
Numerous things are excluded. For example, free of charge services are not counted such as those when family members help each other. In addition, producing things for yourself or others free of charge is also excluded. These are called non-market transactions.
3 0
3 years ago
Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in
Anit [1.1K]

Answer:

a) Portfolio ABC's expected return is 10.66667%.

Explanation:

Some information is missing:

Stock                Expected         Standard             Beta

                         return              deviation

A                            10%                 20%                 1.0

B                            10%                  10%                 1.0

C                            12%                  12%                 1.4

The expected return or portfolio AB = (1/2 x 10%) + (1/2 x 10%) = 10% (it is the same as the required rate for stock A or B)

The expected return or portfolio ABC = (weight of stock A x expected return of stock A) +  (weight of stock B x expected return of stock B) + (weight of stock C x expected return of stock C) = (1/3 x 10%) + (1/3 x 10%) + (1/3 x 12%) = 3.333% + 3.333% + 4% = 10.667% <u>THIS IS CORRECT</u>

Options B, C, D and E are wrong.

5 0
3 years ago
assume that the price of a $1,000 zero-coupon bond with five years to maturity is $567 when the required rate of return is 12 pe
Gelneren [198K]

The price elasticity of the bond, based on the years to maturity and the required rate of return is -0.494

<h3>How to find the price elasticity of he bond?</h3><h3 />

First, find the new price of the bond:
= 1, 000 / ( 1 + 15%)⁵

= $497

The change in price:

= (497 - 567) / 567

= -12.3%

Then find the percentage change in the required rate of return:

= (15 - 12%) / 12

= 25%

The price elasticity of the bond is:

= -12.3% / 25%

= -0.494

Find out more on price elasticity at brainly.com/question/5078326

#SPJ1

3 0
1 year ago
How can the outsourcing of jobs cause production possibilities to expand?
ollegr [7]
Outsourcing of jobs causes product possibilities to expand as they carry out their work or company into having it outside rather than indoor or at home in a way of expanding their functions and their company to be able to make their company known and tackle different circumstances or dimensions that will greatly affect their company.
3 0
3 years ago
Read 2 more answers
Other questions:
  • . ________ refers to a marketing strategy in which the firm develops both the product and its marketing to evoke a distinct impr
    7·1 answer
  • Clarence draws detailed plans for highways and bridges. His job is best described as one focused on . Denise assembles roofing m
    6·2 answers
  • It's illegal to convey false or misleading information about nutrition in magazine and newspaper articles and on television
    6·1 answer
  • An investment offers a total return of 14.0 percent over the coming year. Janice Yellen thinks the total real return on this inv
    12·1 answer
  • Which statement defines equilibrium in a graph showing demand and Supply curves? <br>​
    6·1 answer
  • How do you accept criticism
    7·1 answer
  • ZOOm you there lets get on.
    12·2 answers
  • If the money multiplier is 3 and the fed wants to increase the money supply by $900,000, it could:.
    11·1 answer
  • In their simplest form, bonds are pure ________. a) debt b) equity c) hybrid security d) current assets
    7·1 answer
  • Where have you seen marketing take place?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!