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For this answer we have to know the six categories of premioum:
a. Inflation premium(more risk): high inflation means tha investors will require a higher return in order to invest at a certain project.
b. Maturity premium: the longer the duration of a project, the higher the return that investors will require.
c. Liquidity premium: the excess return that investors will require in order to invest their capital in a less desirable project on a secondary market.
d. Exchange rate risk premium: the excess return that investors will require in order to invest their capital in a foreign financial assets that has volatile exchange rate.
e. default risk premium: .... in order to invest in a more (??) project to default company
f. Real rate of interests
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What is the Difference between coupon rate and required return of a bond?
The difference between the coupon rate and the required return of a bond is dependent upon the type of bond. Junk bonds will have the biggest difference between its return and the coupon rate.
Distinguish between deep discount bond and zero coupon bond?
the main difference between deep discount bond and zero coupon bond is that in case of zero coupon bond no int is payable periodically while in case of deep discount bond int is payable periodically at very lower rate say 2% per annum
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
What is the difference between yield and coupon rate?
yield is the return on investment, for example dividend paid. coupon is the rate of interest related to bonds or debentures.
What is the difference between profit maximization and value maximization?
discount rate
Is the current yield greater than the coupon rate for a discount bond?
yes
Difference between interest rate and discount rate?
Interest rate is the amount that is paid over and above the original loan amount. Discount rate is the amount of money that is cut or reduced from the original price.
What is the difference between federal funds rate and the discount rate?
The Federal Funds rate abbriviated as Fed Funds is the overnight loan rate between banks. The Discount Window is the Federal Reseve Bank of New York's overnight interst rate charged to banks from the Federal Reserve, called the discount window rate.
Is there a discount on sunglasses prices?
Oakley offer Men's Sunglasses and WoMen's sunglasses at discount rate. just find any coupon on Oakleyand get your discount.
What is the difference between discount factor and discount rate?
Discount factor is the factor determining future cash flow, but multiplying the cash flow to obtain present value. Discount rate is used in calculations to equal the cost of capital.
What is a discount?
A blind discount is defined as the difference in cost between the listed cash price for equipment and the reduced financed amount. It can also be the difference between the list price of a ca and a lower interest rate.
What is a blind discount?
A blind discount is defined as the difference in cost between the listed cash price for equipment and the reduced financed amount. It can also be the difference between the list price of a ca and a lower interest rate.
