Which the the adhering to statements room true around bonds: (more 보다 one might be true)A. They are equity instrumentsB. They room debt instrumentsC. They space debt responsibilities with maturities much longer than 7 (or 10) yearsD. They space issued through the commonwealth government, state and local, and also public corporations.E. None of the above
B. They are debt instrumentsD. They space issued by the commonwealth government, state and local, and also public corporations.

You are watching: Which of the following statements is true of bonds?


True or False: shortcut prices vary inversely with transforms in attention rates: as interest prices rise, bond price fall and also as interest prices fall, bond price rise.
Which that the complying with is true:A. If a shortcut is riskier than various other bonds (all various other things organized constant), investors will demand higher rates the return and also this will result in a lower bond price.B. If a bond is less risky than various other bonds (all various other things held constant), investors will demand higher rates the return and also this will an outcome in a lower bond price.C. The discount price on a bond is the required rate of return request by the investorD. The industry value of a link is same to the discounted cash flows that the bond will pay come the investor end the life the the bond.E. Many bonds are originally sold in ~ Par value.
A. If a link is riskier than various other bonds (all various other things organized constant), investors will demand greater rates of return and this will result in a lower bond price.
Which that the following are true around Zero coupon bonds (more 보다 one may be true):A. A zero coupon bond pays attention each periodB. The sector value of a zero coupon bond is just the discounted worth of the final par worth payment.C. Zero coupon bonds space issued in ~ par value.D. Zero coupon bonds are issued at below par valueE. Zero coupon bonds space issued in ~ a premium over par value.
B. The market value the a zero coupon bond is just the discounted value of the last par worth payment.D. Zero coupon bonds space issued at listed below par value
Which statement(s) space true about about bonds?A. Most residential bonds in the U.S. Pay annual coupon interest paymentsB. Most residential bonds in the U.S. Salary semi-annual coupon interest paymentsC. Bonds marketing at a discount from Par have actually prices above par value.D. Bonds selling at a premium over Par have prices below par value.E. Bonds selling at a discount indigenous Par have actually prices below par value.F. Bonds offering at a premium over Par have prices over par value.
B. Most domestic bonds in the U.S. Salary semi-annual coupon interest paymentsE. Bonds marketing at a discount from Par have actually prices below par value.F. Bonds selling at a premium over Par have actually prices above par value.
Which the the statement(s) are true about bonds?A. If existing market prices are higher than a bond"s coupon rate, the shortcut is selling at a premium.B. If present market prices are better than a bond"s coupon rate, the link is offering at a discount.C. If existing market rates are much less than a bond"s coupon rate, the shortcut is offering at a premium.D. If present market rates are less than a bond"s coupon rate, the shortcut is offering at a discount.
B. If current market rates are better than a bond"s coupon rate, the bond is offering at a discount.C. If existing market prices are much less than a bond"s coupon rate, the shortcut is offering at a premium.
True or False: Zero coupon bonds and also "original problem deep discount" bonds are not offered at par once issued.
True or False: Bonds that were originally issued at par however are currently selling in ~ a discount from par space priced that means because interest rates have actually risen in the market due to the fact that the time of the initial issue.
True or False: Bonds that were initially issued at par yet are now selling at a premium from par are priced that method because interest rates have actually risen in the market because the time that the original issue.
True or False: If you construct a link portfolio, the portfolio"s duration will equal the weighted average of all the durations of all the bonds consisted of in that portfolio.

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True or False: If you set the term of the asset next of the balance paper of a bank equal come the duration of the liability next of the bank"s balance sheet, you can safeguard the bank versus interest price risk.
True or False: If the duration of the asset side of the balance paper is greater than the term of the liability next of the balance sheet, the is stated to it is in liability sensitive to interest price risk
If you salary $925 because that a $1,000 par worth bond that has a coupon price of 7%, payment semi-annual interest payments, and has 18 year to go until maturity, what is your annual (effective) productivity to maturity?
If you pay $925 for a $1,000 par value bond that has actually a coupon rate of 7%, payment semi-annual interest payments, and has 18 year to go until maturity, what is your yearly (nominal) productivity to maturity?
A 20 year link with annual interest payments has a coupon price of 5% and a $1,000 par value. What is the value of the bond to an investor who requirements a 4% annual rate that return?
A 20 year shortcut with yearly interest payments has a coupon rate of 5% and a $1,000 par value. What is the worth of the bond come an investors who demands a 6% yearly rate the return?
A 20 year bond through semi-annual attention payments has actually a coupon price of 5% and a $1,000 par value. What is the worth of the bond to an investor who demands a 4% yearly rate the return?
A 20 year bond v semi-annual interest payments has actually a coupon rate of 5% and a $1,000 par value. What is the value of the bond come an investors who demands a 6% yearly rate of return?
If you salary $825 because that a $1,000 par worth bond that has actually a coupon rate of 7%, payment semi-annual attention payments, and also has 18 years to go until maturity, what is your yearly nominal productivity to maturity? (be sure to calculation the yearly nominal yield)
If you pay $825 for a $1,000 par worth bond that has a coupon rate of 7%, pays semi-annual interest payments, and has 18 year to go till maturity, what is your annual effective productivity to maturity? (be sure to calculate the effective annual yield)
If the term of a portfolio is 8.25 and also interest prices decrease native 9% come 8.5%, what perform you think will take place to the sector value the the portfolio?A. Boost by 3.7844%B. To decrease by 3.7844%C. Increase by 0.5%D. Decrease by 0.5%E. Rise by 3.80184%F. Increase by 3.80184%
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Essentials that Investments v S&P bind-in card (Irwin/McGraw-Hill collection in Finance)7th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
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