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worty [1.4K]
3 years ago
11

Which assertions about statement 1 and statement 2 is true? Statement 1: 10,000 bonds sold by Echo Corporation were bought by a

variety of investors. If Echo received $10 million from the sale of these bonds, then bonds were more likely sold on the secondary market than on the primary market. Statement 2: Bonds issued by Foxtrot have a face value of $1,000 and pay annual coupons with the next coupon due in 1 year. If the price of the bond is greater than $1,000, then the bond’s coupon rate is more than its YTM.
Business
1 answer:
Elan Coil [88]3 years ago
5 0

Answer: E. Statement 1 is false and statement 2 is true.

Explanation:

Statement 1 is false because when bonds are sold in the secondary market, the issuing company does not get anything from it. That is because sales in the secondary market are between bond holders and those who would like to buy the bond. For the company to make money from a bond issue, they would have to issue it in the Primary Market where it would come directly from them.

Statement 2 is true because when the coupon rate of a bond is higher than it's YTM, it signals that the bond is a PREMIUM bond which means that it is selling at a rate above Par. It is a measure showing that the bond is not very risky therefore investors charge less on the bond than the coupon rate. If the Coupon rate was lower than the YTM that would mean that investors consider the bond risky and so are charging more to hold it and this would reduce the price of the bond below it's face value.

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The bullet points beneath a one-line mission statement often serve as
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3 years ago
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Today, you sold 540 shares of stock and realized a total return of 6.3 percent. You purchased the shares one year ago at a price
GuDViN [60]

Answer:

B. 5.40 percent

Explanation:

Let today's price per share be $X

Total return = [ (New value + Dividend - Old value) / Old price ] *100

Old value = $24 *540 = $12,960

Next, plug in the numbers to the formula;

0.063 = [ (540X + 117  - 12,960)/ 12,960 ]

0.063 = [\frac{540X-12,843}{12,960} ]

multiply both sides by 12,960;

0.063 *12,960 = 540X - 12,843

816.48 = 540X - 12,843

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816.48 + 12,843 = 540X

13,659.48 = 540X

Divide both sides by 540;

13,659.48/ 540 = X

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Therefore, today's price per share = $25.30

Capital gains yield= (Today's price - Original price) /Original price

Capital gains yield = (25.295 -24) / 24

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Therefore, Capital gains yield is 5.40%

3 0
3 years ago
Which job in the Finance career would be best for someone who had knowledge of banking and credit systems and the ability to rep
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The job of an accounts or accounting clerk is very repetitive.

These tasks are:
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Suppose the data have a bell-shaped distribution with a mean of 25 and a standard deviation of 5. Use the empirical rule to dete
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Answer:

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