How is the IRR on a project related to the YTM on a bond? Explain. | Homework.Study.com (2024)

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• How is the IRR on a project related to the YTM on a bond?
• Explain a bond feature and explain the importance of yield-to-maturity.
• Describe the relationship between the price of a bond and the yield to maturity of the bond.
• Explain how a bond can be classified as a fixed-income security when the yield to maturity can fluctuate significantly over time, depending on the market price of the bond.
• An investor buys a ten-year, zero-coupon bond for $425.75. What is the YTM of the bond? A. 8% B. 8.23% C. 8.65% D. 8.91%
• How is the price determined for a bond (or bond issue)? Explain.
• How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond? .
• How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond? What else might affect the interest rate on a bond?
• What is the YTM of the following zero-bond? For example, take a 5-year bond that costs $1,000 and promises to pay $1,611?
• What is a bond's yield to maturity? How does the price paid for a bond affect its yield to maturity?
• Explain the conceptually how bonds are priced. Moreover, define yield to maturity
• Explain conceptually how bonds are priced. Moreover, define yield to maturity.
• Describe or define and discuss a type of bond that interests you and how it is differentiated from other bonds. Then explain how valuing bonds is done and how interest rates affect their value. Consider the importance of the yield-to-maturity (YTM)
• What is a bond? Explain conceptually how bonds are priced. Can bond prices be affected by interest rate? Why?
• How does a junk bond compare to an investment-grade bond?
• Since a bond has a maturity date, does that imply the investor holds the bond to maturity? Explain.
• How do you calculate the discount rate of a bond?
• You have a semiannual bond with 20 years to maturity and a 6% coupon. The YTM is 8%. What is the bond's price?
• How does a bond's coupon rate affect its duration?
• Does a bond's time to maturity ever equal its duration? Explain.
• Why do bonds exhibit interest rate risk? Explain.
• What is the price of a 15-year 7% bond, if the ytm is 8%?
• Describe or define the following: Bond's yield to maturity.
• What is the relationship between a bond's price and its yield to maturity?
• What is the difference between general obligation bonds and revenue bonds?
• What is the relationship between a bond's market price and its promised yield to maturity? Explain.
• How does the price paid for a bond yield to maturity?
• An eleven-year bond with a coupon rate of 8% and a YTM of 6.73%. What is the bond price? a. $105.76 b. $109.76 c. $1097.60 d. $1057.58
• An eleven-year bond with a coupon rate of 8% and a YTM of 6.73%. What is the bond price?
• What is the price of a 10-year, zero coupon bond paying $1,000 at maturity if the YTM is 5%?
• How is a bond's coupon rate different from its coupon yield?
• How do you calculate the rate on a zero coupon bond?
• What normally happens to a bond's market price as it gets closer to the bond's maturity date? Why is this?
• If a $100,000, 10 year Bond carries an 8% contract rate and the market rate for this bond is 10%, what effect will this have on the bond's selling price? Why?
• a. Explain why the yield on a bond that trades at a discount exceeds the bond's coupon rate. b. Why are longer-term bonds more sensitive to changes in interest rates than shorter-term bonds? c. Does
• What is the difference between a bond and a debenture in NBFC?
• What is the effect on a bond's duration of increasing the bond's maturity?
• What is the difference between an investment-grade bond and a junk bond?
• The price of a two-year zero-coupon bond is $950.10 today. What is the yield-to-maturity on the bond?
• A bond sells for $925.36 and has a coupon rate of 7.60%. If the bond has 20 years until maturity, what is the yield to maturity of the bond?
• When an investor sells a bond in the secondary market before the bond reaches maturity, what determines the return on the bond?
• How does a bond issuer decide on the appropiate coupon rate to set on bonds? Explain the difference between the coupon rate and the required rate of return on the bond. No plagirism please and include
• You hold a four year bond with a price of 97.6% and a coupon of 4%. What is the Yield to Maturity of the bond?
• Explain why two coupon bonds with the same maturity may each have a different yield to maturity.
• What are the current prices of three bonds based on the initial YTM given?
• How is the value of a coupon bond calculated?
• A $100,000 face value T-bill matures in 71 days and has a Bond Equivalent Yield (BEY) of 5.47%. What is the current value (price) of the bond?
• What is the difference between a bond indenture and a bond certificate?
• Calculate the YTM of a bond N= 32 PMT= 38.75 PV= -984 FV= 1000 Flotation Costs are 2% What is the YTM? (Please show your work and the formulas used.)
• What is the relationship between a bond's price and its term to maturity when the bond's coupon rate is equal to its yield to maturity?
• What is the difference between bearer bonds and registered bonds?
• How does a bond's stated rate differ from its yield rate? Which one is used to calculate the interest payment?
• You want to sell a bond for over $1,000. Can you do that if the coupon rate is 6.5% and the bond yield is 6.8%? Explain.
• LKD Co. has 1% coupon bonds with a YTM of 8.7%t. The current yield on these bonds is 9.6%. How many years do these bonds have left until they mature?
• A bond sells for $962.24 and has a coupon rate of 7.90 percent. If the bond has 24 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $963.33 and has a coupon rate of 7.70 percent. If the bond has 25 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $975.08 and has a coupon rate of 7.30 percent. If the bond has 27 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $921.10 and has a coupon rate of 7.40 percent. If the bond has 19 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $902.30 and has a coupon rate of 6 percent. If the bond has 12 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $989.90 and has a coupon rate of 6.30 percent. If the bond has 32 years until maturity, what is the yield to maturity of the bond ?
• A bond sells for $894.17 and has a coupon rate of 6.20 percent. If the bond has 13 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $902.30 and has a coupon rate of 8 percent. If the bond has 16 years until maturity, what is the yield to maturity of the bond?
• How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond.
• For bonds selling at a premium, what is the relationship between the yield to call and the yield to maturity?
• How is the value of a bond determined?
• You paid $865.50 for a corporate bond that has a 6.75% coupon rate. What is the bond's current yield? a. 8.375% b. 7.800% c. 15.001% d. 6.667%
• Identify/explain the relationship between the coupon rate and yield to maturity for: 1. Discount Bonds 2. Premium Bonds 3. Par Value Bonds
• You are looking at investing in a 4-year bond with a face value of 1000, a coupon rate of 12 %, and a YTM of 7 %. How much is the duration of the bond?
• What is the relationship between Bonds and interest rates? What are the calculations involved with pricing a bond and a stock? Choose a stock that is publicly traded and explain how you think the fut
• Do some research and find some bonds with differing yields to maturity (YTM). How do you explain the difference?
• Price each bond and explain how the number of years to maturity and the coupon rate affect the current price of bonds. Jason Greg is a recent retiree who is interested in investing some of his savings in corporate bonds. Listed below are the bonds he is
• A bond that pays interest forever and has no maturity date is a perpetual bond. How is the yield to maturity on such a bond determined?
• Suppose you buy an 8.6% coupon bond today for $1,080. The bond has 9 years to maturity. a. What rate of return do you expect to earn on your investment? b. Two years from now, the YTM on your bond has
• LKD Co. has 11% coupon bonds with a YTM of 8.7%. The current yield on these bonds is 9.6%. How many years do these bonds have left until they mature?
• What is the yield to maturity on this 3 year 22% coupon rate bond?
• A bond sells for $985.45 and has a coupon rate of 6.50 per cent. If the bond has 31 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $921.08 and has a coupon rate of 6.80 per cent. If the bond has 16 years until maturity, what is the yield to maturity of the bond?
• A bond sells for $965.25 and has a coupon rate of 7.50 per cent. If the bond has 26 years until maturity, what is the yield to maturity of the bond?
• How can a bond mutual fund report a return of over 13% when the coupon rate of the bonds they are holding are just 7% and interest rates are falling?
• Find 3 bonds with differing yields to maturity (YTM). How do you explain the difference?
• Suppose you buy a 6.8 percent coupon bond today for $1,120. The bond has 8 years maturity. a. What rate of return do you expect on your investment? b. Two years from now, the YTM on your bond has incr
• Two bonds, bond A and bond B, are identical except that bond A is convertible and bond B is not. Which bond will have the higher price? Explain why.
• What is the price of a one-year $1,000 bond with a 3% coupon rate if the yield to maturity is 5.2%?
• What is the difference between the yield to maturity on a coupon bond and the rate of return?
• What happens to the fair present value of a bond when the required rate of return on the bond increases?
• Suppose the spot rates for government bond with maturities of one, two and three years are given by s1=5%, s2=7% and s3=8%. What can you infer about the yield to maturity of a three year pure discount bond issued by the government? Explain why. a) 6.659%
• Finding the Bond Maturity Cavo Corp. has 7% coupon bonds making annual payments with a YTM of 8.34%. The current yield on these bonds is 8.13%. How many years do these bonds have left until they matur
• What is a bond spread and how is it related to the default risk premium? How are bond ratings related to default risk?
• You paid $1128 for a corporate bond that has a 10.72 percent coupon rate. What is the bond's current yield?
• You paid $1171 for a corporate bond that has a 10.81 percent coupon rate. What is the bond's current yield?
• Explain how a long-term bond's price is impacted in opposite directions when the required rate of return on the bond rises.
• Suppose that a callable bond had an 8% coupon, a 6% YTM and a 4% YTC The bond issue is callable in 3 years. For this bond issue, investors would expect the bonds: A) Not to be called and earn the YTM
• A perpetual bond pays a coupon of $25 per year. If in year 1 this bond sells for $200, what is its yield to maturity? If interest rates move to 20% next year, what will this bond sell for?
• If the following bonds are identical except for coupon, what is the price for Bond Y?
• What is the price of a 10-year, zero coupon bond paying $1,000 at maturity if the YTM is 15%?
• What is the price of a 10-year, zero coupon bond paying $1,000 at maturity if the YTM is 10%?
• An investor pays $989.40 for a bond. The bond has an annual coupon rate of 4.8%. What is the current yield on this bond? A. 4.80% B. 4.85% C. 9.60% D. 9.70%
• Explain how these bond risk components (Coupons, face value, price of the bond, ytm, time till maturity) interact to immunize a bond portfolio.
• a. How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond. Please give a 200-300 word explan
• Interpreting Bond Yields. Suppose you buy a 7% coupon, 20 year bond today when it is first Issued. If interest rates suddenly rise to 15%, what happens to the value of your bond?