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The market interest rate is the rate of interest on cash deposits or loan which is determined by the market. Factors such as demand and supply of cash in the market
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What occurs when a bonds stated interest rate is less than the market interest rate?
Since the current market interest rate is higher, it is more attractive to a new investor then the bond with a lower interest rate. Thus, the price of the lower interest rate bond has to decline to be competitive with new bonds in the market.
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
What happens when issuing bonds payable when the market interest rate is less than the stated interest rate?
premium
How would you define the market rate for a bond?
The actual interest rate, however, determined at auction, is referred to as the market rate. The market rate may equal the stated rate, or it may be higher or lower.
When a bonds stated interest rate is less than the market interest rate is the rate at a discount or premium?
When the coupon rate (the contractual periodical "interest" payments) are lower than the yield (the market required return) the bond will be in discount. This discount makes up for the low value of the coupons.
What occurs when a bond's stated interest rate is less than the market interest rate?
Since the current market interest rate is higher, it is more attractive to a new investor then the bond with a lower interest rate. Thus, the price of the lower interest rate bond has to decline to be competitive with new bonds in the market.
What occurs when a bonds stated interest rate is less than the market interest rate?
Since the current market interest rate is higher, it is more attractive to a new investor then the bond with a lower interest rate. Thus, the price of the lower interest rate bond has to decline to be competitive with new bonds in the market.
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
What happens when issuing bonds payable when the market interest rate is less than the stated interest rate?
premium
How would you define the market rate for a bond?
The actual interest rate, however, determined at auction, is referred to as the market rate. The market rate may equal the stated rate, or it may be higher or lower.
Is current Market Rate of Interest the same as yield to maturity?
It depends. YTM is calculated in the same way as IRR. You take all future cash flows and discout it by x% and equate to current market price. Then you solve for x% and what you get will be YTM. So if current price of bond is calculated by current market rate of interest than YTM=Current Market Rate of Interest. How ever bond price not always is equal to that price. Very often current yield(coupon/current market price) is different from current rate of interest. In such case YTM will differ from Current Market Rate of Interest.
When a bonds stated interest rate is less than the market interest rate is the rate at a discount or premium?
When the coupon rate (the contractual periodical "interest" payments) are lower than the yield (the market required return) the bond will be in discount. This discount makes up for the low value of the coupons.
What are the contract rate and the market rate for bonds?
Contract rate is known as a coupon rate (because older securities actually had coupons that were clipped and sent to paying banks for periodic interest). It is the fixed rate of interest for which a particular bond was issued. Market rate is actually known as yield (prevailing interest rate for new bonds) and yields change with prevailing interest rates. Yields are closely aligned with prevailing interest rates.
What is the market cap for WisdomTree Japan Interest Rate Strategy Fund JGBB?
As of July 2014, the market cap for WisdomTree Japan Interest Rate Strategy Fund (JGBB) is $4,873,000.00.
How do you know when you're getting the best money market rate?
Money Market Rates typically are among the lowest interest rate paying investments. You can check on bankrate.com for current interest rates.
True or false A corporation that issues bonds at a discount will recognize interest expense at a rate which is greater than the market interest rate?
True
What occurs when a bond's stated interest rate is greater than the market interest rate?
The bond's price will be in premium, meaning exceed 100
