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If a bond is selling more than its face value its selling at a what?
Premium.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
What is it called when a bond is selling for less than its face value?
A bond selling for less than its face value is classified as being sold at a discount. A bond can sell at a discount if interest rates increase or if the repayment ability of the bond issuer becomes questionable due to a reduction in the credit rating of the issuer.
What does it mean went a bond is issued at a premium?
When a bond is issued at a premium, it means that the bond's selling price is higher than its face value or par value. This typically occurs when the bond’s coupon rate is higher than the prevailing market interest rates, making it more attractive to investors. As a result, investors are willing to pay more for the bond to receive the higher interest payments. The premium is amortized over the life of the bond and reduces the effective yield for the investor.
What happens when a bond is issued at a premium?
When a bond is issued at a premium, it means the bond's selling price is higher than its face value. This typically occurs when the bond's coupon rate is higher than prevailing market interest rates, making it more attractive to investors. As a result, the issuer receives more funds upfront, but the premium will be amortized over the bond’s life, reducing the interest expense recognized on the issuer's financial statements. Ultimately, the bondholder will receive the face value at maturity, resulting in a loss of the premium amount.
If a bond is selling more than its face value its selling at a what?
Premium.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
What is it called when a bond is selling for less than its face value?
A bond selling for less than its face value is classified as being sold at a discount. A bond can sell at a discount if interest rates increase or if the repayment ability of the bond issuer becomes questionable due to a reduction in the credit rating of the issuer.
What does it mean went a bond is issued at a premium?
When a bond is issued at a premium, it means that the bond's selling price is higher than its face value or par value. This typically occurs when the bond’s coupon rate is higher than the prevailing market interest rates, making it more attractive to investors. As a result, investors are willing to pay more for the bond to receive the higher interest payments. The premium is amortized over the life of the bond and reduces the effective yield for the investor.
What happens when a bond is issued at a premium?
When a bond is issued at a premium, it means the bond's selling price is higher than its face value. This typically occurs when the bond's coupon rate is higher than prevailing market interest rates, making it more attractive to investors. As a result, the issuer receives more funds upfront, but the premium will be amortized over the bond’s life, reducing the interest expense recognized on the issuer's financial statements. Ultimately, the bondholder will receive the face value at maturity, resulting in a loss of the premium amount.
If a bond with face value of 1100 and a coupon rate of 8 is selling at a price of 970 is the bond's yield to maturity more or less than 8 and what is the current yield?
When a bond sells at a discount, the yield is higher than the coupon rate. Your income is 1,100 x 8% = 88. You invested 970. 88/970 = 9.07% yield.
What is a bond sold above face value?
A bond sold above face value is known as a premium bond. This occurs when the bond's coupon rate, or interest rate, is higher than the prevailing market rates, making it more attractive to investors. As a result, buyers are willing to pay more than the bond's face value to receive the higher interest payments. The premium reflects the additional value investors place on the bond's higher coupon rate.
When bonds are sold for more than face value carrying value is equal to?
When bonds are sold for more than face value, the carrying value is equal to the face value plus any premium. The premium is the excess amount paid by the investors over the face value of the bond and is amortized over the life of the bond.
What are the penalties for early withdrawal of corporate bonds?
Unless there is a particular stipulation that one incurs a penalty for selling a corporate bond, then the price you get for a bond is what the market will pay. The term "withdraw" isn't quite correct, all you are doing is selling the bond to someone else. There are several factors that drive the price you'll get for the bond: Prevailing interest rates - are they lower or higher than the bond's coupon? Credit rating of company paying the bond - has it improved or deteriorated compared to when you bought the bond? Market liquidity of that bond issue - selling an IBM bond that is traded daily is easier and cheaper than selling a MySmallCompany Inc. bond that is sold only rarely. Dealer spreads narrow the more often a particular bond type is traded. Tax rates on corporate bond interest - have they changed since you bought the bond?
Is a us war bond dated oct 1987 worth more than face value?
yes
Are the two parts in a double bond of equal strength?
In a double bond, the two parts are not of equal strength. The sigma bond, which is formed by head-on overlap of orbital, is stronger than the pi bond, which is formed by sideways overlapping of p-orbitals. Therefore, the sigma bond is stronger than the pi bond in a double bond.
Is zero coupon bond more sensitive to change in interest rate than fixed coupon bond?
The zero coupon bond is more sensitive to change in rate (inflation) because the market value is not based on a fixed coupon.
