Which of the following bonds will have the smallest percentage increase in value if all market...

Which of the following bonds will have the smallest percentage increase in value if all market interest rates decrease by 1%?

		A. 20-year, zero coupon bond.
		B. 10-year, zero coupon bond.
		C. 20-year, 10% coupon bond.
		D. 20-year, 5% coupon bond.
		E. 1-year, 10% coupon bond.

Expert Solution

jeff jeffy answered 2 years ago

1. Which of the following bonds would have the highest percentage change in value if all...

1. Which of the following bonds would have the highest percentage change in value if all interest rates in the economy decrease by 1%? Group of answer choices 20-year, zero coupon bond. 20-year, 5% coupon bond. 10-year, zero coupon bond. 1-year, 10% coupon bond. 20-year, 10% coupon bond. 2. Suppose you are signing a loan contract of $65,000 at an interest rate of 8.5%. You must make 5 equal payments at the end of the year for 5 years. How...

If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value

If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in valueA 1-year zero coupon bond.A 1-year bond with an 8% coupon.A 10-year bond with an 8% coupon.A 10-year bond with a 12% coupon.A 10-year zero coupon bond.

which of the following strategies may increase economic value added a. increase profit as a percentage...

which of the following strategies may increase economic value added a. increase profit as a percentage of capital employed b. borrow additional funds and invest in asset that earn more than the weight average cost capital. c. Sell off assets that earn more than the weighted average cast at capital. d. Increase profit as a percentage of capital employed and borrow additional funds and invest in asset that earn more than the weight average cost capital.

3. Calculate the fair present value of the following bonds, all of which have a 10...

3. Calculate the fair present value of the following bonds, all of which have a 10 percent coupon rate (paid semiannually), face value of $1,000, and a required rate of return of 8 percent. a. The bond has 10 years remaining to maturity. _________ b. The bond has 15 years remaining to maturity. _________ c. The bond has 20 years remaining to maturity. _________ d. What do your answers to parts (a) through (c) say about the relation between time...

Calculate the fair present value of the following bonds, all of which have a 5 percent...

Calculate the fair present value of the following bonds, all of which have a 5 percent coupon rate (paid semiannually), face value of $1000, and a required rate of return of 8 percent. a. The bond has 10 years remaining to maturity. b. The bond has 15 years remaining to maturity. c. The bond has 20 years remaining to maturity. d. Wha do your answers say about the relationship between time to maturity and present value?

Which of the following is the smallest volume? Which of the following is the smallest volume?...

Which of the following is the smallest volume? Which of the following is the smallest volume? 9.0 × 106 nL, 2.6 cm3, 3.5 × 102 mL, 0.065 dL

A set of bonds all have the same maturity. Which one has the least percentage price...

A set of bonds all have the same maturity. Which one has the least percentage price change for given shifts in interest rates: (choose one correct answer) not enough information to determine. zero coupon bonds. pure discount bonds. low coupon bonds. high coupon bonds.

Which of the following is true of bonds? a Since bonds have a face value of...

Which of the following is true of bonds? a Since bonds have a face value of $1,000, they can be purchased at any time for $1,000. b Once purchased, bonds cannot be sold and must be held until maturity. c Investors in bonds are part owners of the corporation that issued the bonds. d For the corporation that issues bonds, bonds are a way to fund its assets.

Consider the following data concerning four corporate bonds, all of which have a face value of...

Consider the following data concerning four corporate bonds, all of which have a face value of $1,000 and have semiannual compounding: Bond 1 2 3 4 YTM 8.0% 7.5% 8.5% 8.5% Coupon Rate 8.0% 7.0% 9.0% 9.0% Years until Maturity 5 10 10 20 Which of these bonds is currently priced at a discount?

Calculate the value of each of the bonds shown in the following table, all of which...

Calculate the value of each of the bonds shown in the following table, all of which pay interest semiannually. Bond Par Value Coupon interest rate Years to maturity Required stated annual return A $500 8% 9 11% B 1,000 13 20 11 C 500 15 5 16 The value of bond A, B, C is $?? (Round to the nearest cent.)

Question