0
When a bond is selling for more than its par value it is selling at a?
Wiki User
∙ 15y ago
Premium
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
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.
Why are compound interest bonds better than simple interest bonds?
Imagine you have 2 different types of bonds:Compound:Let's say bond value is £100 and you get 4% quarterly interest on this investment.Your bond value after one quarter will be:Bond Value=£100Interest Earned: 4%=£4Total Value=£104After 2nd quarter, the bond value would be:Opening Value from quarter 1=£104Interest Earned: 4%=£4.16Total Value=££108.16After 3rd quarter, the bond value would be:Opening Value from quarter 1=£108.16Interest Earned: 4%=£4.33Total Value=££112.49After 4th quarter(or after a year), the bond value would be:Opening Value from quarter 1=£112.49Interest Earned: 4%=£4.50Total Value=££116.99SimpleBond Value=£100Interest Earned=16%(because it's 4% per quarter and there are 4 quarters in a year)=£16Total Bond Value=£116so bond value after a year is more under Compound than it is under Simple interest bond.The reason is because simple interest is calculated on one single figure while compound interest is calculated over the opening figure of month,quarter or year.So compound interest gives more interest income and hence it's better than simple interest bond.
Is American money worth less than euro?
1 euro is worth approx. 1.35 dollars, so the value of the euro is more than the value of the dollar. If something was selling for 2 euro, you'd have to pay $2.70 for it.
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.
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.
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?
No because if you look up the value of a C-C bond and double it you'll find that it is more than the value of a C=C double bond. Therefore they can't be the same strength.
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.
Why the H-F bond is expected to be more polor than the H-I bond?
The H-F bond is more polar than the H-I bond because F (fluorine) is more electronegative than I (iodine). It thus attracts the shared electrons more than does the I, making it a more polar bond.
Is LPG has high calorific value than methane?
Methane is CH4 and LPG(Butane) is C4H10. The energy in the Carbon Carbon bond (C-C)is more than that in the Carbon Hydrogen bond (C- H). Since there are more number of C-C bonds in butane (LPG) than in methane,calorific value of LPG or butane is higher than that of methane.
What is a discount on bonds payable account in accounting?
All bonds have a stated or "par" value, which is the value that the bond will hold after the bond term is completed at maturity (par value is usually $1000 per bond). When a bond is issued at a discount, it means that a company issued the bond for less than the par value (i.e less than $1000). The original discount is calculated as the difference between the par value and the bond sale price, and it is amortized over the life of the bond.
