A bond is registered “as to principal only” means that the
bond trades
a)In the investor’s...
A bond is registered “as to principal only” means that the
bond trades
a)In the investor’s name with coupons attached registered in
the investor’s name
b)In the investor’s name with coupons attached
c)With coupons attached
d)In the investor’s name without coupons attached
Solutions
Expert Solution
option B : In the investor’s name with coupons attached
A bond registered as to principal only means that the investor
is to attach coupons to get the interest and at the time of
maturity it is given (principal amount) to the investor.
A bond is convertible into common stock for $25. The bond
trades at 120 and the stock trades at $32. Which of the following
are true?
I. The stock trades above parity
II. The stock trades below parity
III. Converting the bond would be profitable
IV. Converting the bond would not be profitable
I & III
II & IV
I & IV
II & III
A bond is convertible into 50 shares of common stock. The bond
trades at 110 and the stock trades at $21. Which of the following
are true?
I. The stock trades above parity
II. The stock trades below parity
III. Converting the bond would be profitable
IV. Converting the bond would not be profitable
II & III
I & III
II & IV
I & IV
Issuer Symbol
Callable Coupon _rate Maturity
Moody Rating Price
YieldMMM
BRK3680632
Yes
7%
10/21/2030
Aa3
120
_____a, This bond is callable. This means thatMMM bondholders can convert bond to stocks when the bond is
called.MMM company is expected to call back this bond when the market
interest rate decreases.MMM is expected to call back this bond when MMM stock price
increases.MMM is expected to call back this bond when MMM stock price
decreases.b, The...
8. Bond A has a yield to maturity 20% and trades at $100. This
bond pays semi-annual coupons. Face value is also $100 and time to
maturity is 3 years. a. Calculate the duration of this bond. Note:
Yield to maturity is not necessarily the same as effective yield
(APR vs. EAR) b. Calculate the convexity of this bond c. If yields
decrease by 30% (not p.p.), what is the impact on prices in
percentage terms i. Using only duration...
A coupon bond pays out 2% every year on a principal of $100. The
bond matures in six years and has a market value of $92. Calculate
the yield to maturity, duration and convexity for the bond.
(Please provide a well detailed answer with the equations used
for each part. Thank you!)
A 5 year semiannual coupon bond with a face value of $1,000
trades at $938. The market-determined discount rate is 9%. What is
the coupon rate? Answer in percent and round to two decimal
places.
Jun owns a bond with a 4% coupon that pays interest annually. It
trades at 114% and matures in 14 years.
a. What is its yield to maturity?
b. If its interest was paid semi-annually, what
would be its yield to maturity?
c. Would you prefer to be paid the annual 4% coupon
compound annually or semi-annually?
1.A bond currently trades at $1,045.00 and has a face value of
$1,000. If the annual yield is 6% and the bond has 19 years to
maturity, what is its coupon rate?
2. A bond maturing in 7 years at a par value of $1,000 has a
coupon rate of 6% and current yield of 7%. What is the price of the
bond?