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Assuming that the bond was issued several years. Is it true the following equation can be used to find the value of a bond with N years to maturity that pays interest once a year?
Wiki User
∙ 10y ago
yes
Wiki User
∙ 10y ago
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Yield to maturity vs yield to call?
Yield to maturity assumes that the bond is held up to the maturity date. This is a disadvantage. If the bond is a yield to call , it can be called prior to the maturity date. Thus, the ivestor should sell the callable bond prior to maturity if he expects that he will earn higer return by doing so (in other words when yeild to call is higher than held to maturity).
What is the promised yield to maturity calculation assumes?
The promised yield to maturity calculation assumes
What happens when a yield to maturity is less than the yield to call?
The issuer will call the bonds and issue new bonds to the maturity date.
What is the value of a call option on maturity?
The value of a call option on maturity is equal to its intrinsic value.For instance, a call option with a strike price of $10 on maturity and its underlying stock being at $15 will have a value of $5, which is its intrinsic value.
Rebecca's 5000 CD is nearing its maturity and will have a maturity value of 6101.89. The renewal rate for her CD will be at a historic low and will lock up her money for another 5 years. Which option?
Withdrawl :)
What is a yield to maturity?
A yield to maturity is the internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.
The equation for computing interest on an interest bearing note is as follows interest equals maturity value times interest rate times time?
yes
Which of the following bonds has the greatest interest rate price risk?
There is no bond specified. Probably the one with the greatest maturity.
Maturity value of an interest-bearing note payable is the?
Face value plus interest.
Does bond pay interest on maturity?
Yes. At maturity you get the final coupon payment in addition to the return of principal.
What is a runoff cash flow?
Runoff cash flow refers to assets that are prepaid before maturity or liabilities that are withdrawn before maturity. In either case, the result is higher interest rate risk. This is because the interest rate risk is measured assuming no prepayment of assets or withdrawal of liabilities occur before maturity. The risk of runoff cash flows is one of the important weaknesses of the repricing model, which is commonly used model in smaller financial institutions.
What is maturity value?
The new value to a loan or investment after interest.
What is repaid to the investor on a bond's maturity date?
The principle and interest.
How can you estimate interest rate risk?
Interest rate risk is measured by time to maturity and coupon rate
What is non-zero coupon bonds?
if a bond has finite maturity or limited maturity then we must consider not only the interest rate stream but also the maturity value (face value).regardsSajida Gul
Is The maturity value of a loan is the total amount of principal and interest that must be repaid?
Yes it is
Where you pay off debt at face value plus interest is called?
maturity value
