Question
In: Finance
Which ONE of the following statements is wholly CORRECT: a. Zero-coupon bonds have fixed coupon rate....
Which ONE of the following statements is wholly CORRECT:
| a. |
Zero-coupon bonds have fixed coupon rate. |
|
| b. |
Zero coupon bonds are sold at a price above par value. |
|
| c. |
None of the answers are correct. |
|
| d. |
Zero-coupon bonds are sold at a price below par value. |
|
| e. |
Zero-coupon bonds are valued using simple interest. |
Solutions
Expert Solution
Zero coupon bonds do not pay any interest during the tenure of bond. It is issued at a discount and redeemed at par .
Correct Answer D
jeff jeffy answered 2 years agoRelated Solutions
Which of the following statements is NOT CORRECT? a. When a bond's coupon interest rate is...
Which of the following statements is NOT CORRECT?
a. When a bond's coupon interest rate is less than the market
interest rate, the bond will sell at a value less than its par
value and is known as a discount bond.
b. Bonds are basically loans, so they usually make regular
interest payments to the bondholders. The percentage of this
interest payment relative to the bond's face value is called the
coupon interest rate.
c. For a fixed-rate bond, the...
Which of the following statements is FALSE? A. Treasury Bills are U.S. government zero-coupon bonds with...
Which of the following statements is FALSE? A. Treasury Bills
are U.S. government zero-coupon bonds with a maturity of up to one
year. B. Zero-coupon bond almost always sells at a discount. C.
Coupon bond can sell at a discount, at par, or at a premium. D.
Zero-Coupon Bond does not make coupon payments E. Coupon bond pays
only face value and no coupon at maturity.
Which of the following statements concerning bonds is (are) correct? :I. Municipal bonds have lower yields...
Which of the following statements concerning bonds is (are)
correct? :I. Municipal bonds have lower yields than Treasury bonds.
:II. Low coupon bonds have higher yields than high coupon bonds.
:III. General obligation bonds yield more than revenue bonds. :IV.
Initially, callable bonds have higher yields than noncallable
bonds.
a.
I and III only
b.
I and IV only
c.
I, III and IV only
d.
II and IV only
Which one of the following statements is correct?
Which one of the following statements is correct? A. Ending Cash Balance on the Cash Budget is an input to the SG&A Budget. B. Ending Cash Balance on the Cash Budget is an input to the Forecasted Income Statement. C. Ending Cash Balance on the Cash Budget is an input to the Sales Budget. D. None of the above statements are correct.
which of the following risk-free zero-coupon bonds could be bought for the lowest price? A. one...
which of the following risk-free zero-coupon bonds could be bought
for the lowest price?
A. one with a face value of $1,000 a ytm of 6.2% and 18 years
to maturity
B. one with a face value of $1,000 a ytm of 7.8% and 15 years
to maturity
C. with a face value of $1,000 a ytm of 6.8% and 18 years to
maturity
D.one with a face value of $1,000 a ytm of 5.9% and 20 years
to maturity
Fill in the table below for the following zero-coupon bonds, all of which have par values...
Fill in the table below for the following zero-coupon bonds, all
of which have par values of $1,000. Use semi-annual periods.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.) Solve for the fill in the
blanks.
Price
Maturity (years)
Yield to Maturity
$440
20
%
$540
20
%
$540
10
%
10
10.40
%
10
7.60
%
$440
8.40
%
Fill in the table below for the following zero-coupon bonds, all of which have par values...
Fill in the table below for the following zero-coupon bonds, all
of which have par values of $1,000. Use semi-annual periods.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
Price
Maturity (years)
Yield to Maturity
$
450
20
%
$
550
20
%
$
550
10
%
$
10
10.50
%
$
10
7.50
%
$
450
8.50
%
Fill in the table below for the following zero-coupon bonds, all of which have par values...
Fill in the table below for the following zero-coupon bonds, all
of which have par values of $1,000. Use semi-annual periods.
Price Maturity (Years) Yield to Maturity
390 20 ?
610 20 ?
490 10 ?
? 10 9.90
? 10 6.90
390 ? 7.90
Fill in the table below for the following zero-coupon bonds, all of which have par values...
Fill in the table below for the following zero-coupon bonds, all
of which have par values of $1,000. Use semi-annual periods.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
Price
Maturity (years)
Yield to Maturity
$430
20
%
$530
20
%
$530
10
%
10
10.30
%
10
7.70
%
$430
8.30
%
Which one of the following statements concerning the annual percentage rate (APR) is correct?
Which one of the following statements concerning the annual
percentage rate (APR) is correct?The APR considers interest on interest.The rate of interest you actually pay on a loan is called the
APR.The effective annual rate is lower than the APR when an interest
rate is compounded quarterly.Lenders are not permitted to disclose or advertise the APR of a
loan.The APR equals the effective annual rate when simple interest is
applied to a loan.
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