0
What else can I help you with?
Price and Yield- An 8 percent semiannual coupon matures in 5 years The bond has a face value of 1000 and a current yield of 8.21 percent What are the bonds price and YTM?
The bond's price is $996.76. The YTM is 8.21%. by E. Sanchez
What is the difference between callable and putable bonds?
Callable bonds give the issuer the right to buy back the bond before it matures, while putable bonds give the bondholder the right to sell the bond back to the issuer before it matures.
When the Federal board engages in a tight money policy the price of government bonds tend to?
fall
What does the effect of rate of interest on bonds?
it will increase the price of bonds
Explain why an expectation of Central Bank official rate hikes would cause bond price to fall?
The price of bonds is inversely related to interest rates. If interest rates rise, the value of existing bonds will decline since the coupon rate available on newly issued debt will be higher due to the increase in interest rates. The price of existing bonds will drop in price until the bond provides a yield similar to comparable newly issued debt.
How do Treasury bills and bonds work?
In this scenario, the investor receives periodic payments (annuity payments) and a lump sum when the debt instrument matures.
When the corporation issuing the bonds has the right to repurchase the bonds prior to the maturity date for a specific price the bonds are?
callable bonds
What are the different types of yields on bonds?
The different types of yields on bonds include current yield, yield to maturity, yield to call, and yield to worst. Current yield is the annual interest payment divided by the bond's current price. Yield to maturity is the total return anticipated on a bond if held until it matures. Yield to call is the yield calculation if a bond is called by the issuer before it matures. Yield to worst is the lowest potential yield that can be received on the bond.
What happens to the price level when the government buys bonds?
when the govt. performs open market operations, or puchases sercurities such as bonds, the price level increases.
What separates premium bonds from other types of bonds?
There are many things that separate premium bonds from regular bonds. Premium bonds, unlike regular bonds, are any bonds that are already trading at a price above par.
What happens to bonds when interest rates fall?
When interest rates fall, the value of existing bonds increases. This is because the fixed interest rate on the bond becomes more attractive compared to new bonds issued at lower rates.
How do interest rates affect the price (Value) of bonds?
Yields and Price for bonds are inverse. So when price goes up yield goes down. When price goes down , yield goes up. The coupon always remains fixed.
