The corporate bond market is “thin” compared to the market for money market securities or corporate stocks. a) true Prices in the corporate bond market tend to be less volatile than prices of securities sold in markets with greater trading volumes. a) False All other things being equal‚ a given change in the interest rates will have a greater impact on the price of a low-coupon bond than a higher-coupon bond with the same maturity. a) True If investors believe inflation will be increasing in the
Premium Bond Debt
Mid Term – October 2014 Bond Pricing Qu 1: Time to Maturity Zero Coupon Rate Discount Factor 1 5% 2 6% 3 7% 4 8% 5 9% Give the formula for the discount factor in terms of the zero coupon rate. Use the formula to fill in the discount factors in the table above (you can write the formula or using excel calculate the numerical value). Assume that the government wishes to issue a new 5 year bond priced at 100 (called a par coupon bond as it is priced at par i.e. the price is the same as the face
Premium Bond Bonds Investment
(a) the six-month zero-coupon bond rate is calculated as follows: Rm=[m*(FV-PV)]/PV Rm=[2*(100-98)]/98=0.0482 Then this is converted into a continuously compounding rate: Rc=m*ln(1+Rm/m) Rc=2*ln(1+0.0482/2)=0.04763 The 1 year zero-coupon bond rate is calculated as follows: Rm=[1*(100-95)]/95=0.05263 Then this is converted into a continuously compounding rate: Rc=1*ln(1+0.05263/1)=0.05129 The 1.5 year zero-coupon bond rate is calculated as follows:
Premium Futures contract Bond Forward contract
is day 0‚ the loan will be initiated on day 60 and will mature on day 210.) The implied forward rate over 150 days‚ and hence the rate on 150-day FRA‚ is 2.5%. The actual interest rate over that period could be either 2.4% or 2.6%. (a) If the interest rate on day 60 is 2.6%‚ how much will the lender have to pay if the FRA is settled on day 60? How much if it is settled on day 210? (b) If the interest rate on day 60 is 2.4%‚ how much will the lender have to pay if the FRA is settled on day 60? How much
Premium Bond
Year X Y 1 8% 16% 2 21 38 3 17 14 4 -16 -21 5 9 26 2) You bought one of the Great White Shark Repellant Co’s 8 per cent coupon bonds one year ago for $1030. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds today ‚when the required return on the bonds is 7 per cent .If the inflation rate was 4.2 per cent over the past year ‚what was your total real return on investment ? 3) A stock has had returns of 3 per cent ‚38 per cent
Premium Investment Rate of return Interest
e.‚ of a zero coupon bond which pays $1 in half-year n. In the next two columns there are the cash flows of two bonds‚ A and B. Essentially‚ bond A pays a 20% semi-annual coupon and bond B pays a 10% semi-annual coupon. Both bonds mature in 2.5 years‚ when each also pays its principal of 100. Assume semi-annual compounding. Half Year 1 2 3 4 5 n Bond A Bond B .95 .91 .87 .80 .70 10 10 10 10 110 5 5 5 5 105 A. Calculate the price of each bond assuming there
Premium Bond Bonds
market instrument? A) a sixmonth CD B) a threemonth Treasury bill C) a tenyear bond D) an agreement for a bank to loan funds directly to a company for nine months. 7. Which of the following is a money market security? A) Treasury note B) municipal bond C) mortgage D) commercial paper 8. The most common investors
Premium Supply and demand Inflation Bond
privileges and rights. For an instance‚ normally‚ they cannot brag in and ask for the details of the company v. Stockholders will be the last one to get paid because the company should pay first their creditors‚ suppliers and employees. 4. The Difference Between Bonds and Stocks in Investment Since each offer of stock represents to a possession stake in a company‚ individuals that invests into the stock can earn profit when the company performance being well and its value rises or increases overtime.
Premium Management Employment Corporation
Difference between rate and sequence Rate/Speed involves a time frame linked to age. Sequence/Order involves patterns and an order of development linked to body‚ mobility and intellectual growth - sequence can include an order that’s both positive and negative - deterioration. Rate - what happens at 1 year old‚ 24 months old‚ 7 years old .. Sequence - how things happen in an expected order‚ sequence ie: breastfed‚ weaned‚ full meals. lie‚ sit‚ crawl - maybe‚ stand‚ walk‚ run.. Sequence
Premium Teeth Fibonacci number Walking
Explain the difference between a peptide bond and a sulfide bond. Draw an example of each. (Insert a picture of your drawing of the molecule or a scan of your drawing of the molecule) A peptide bond is a covalent bond. This bond is between two amino acid molecules. The formation of a peptide bond occurs when a carboxyl group present on one molecule reacts with an amino group that is present on the molecule. This reaction releases H2O. In organic chemistry‚ I learned that a sulfide bond has to usually
Premium Amino acid Protein Atom