Bond coupon and yield

    • [DOC File]Soln Ch 13 Bond prices

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      The coupon rate of a bond equals: A) its yield to maturity. B) a percentage of its face value. C) the maturity value. D) a percentage of its price. Answer: B . 2. What happens when a bond’s expected cash flows are discounted at a rate lower than the bond’s coupon rate?

      bond yield vs coupon rate


    • Yield to Maturity vs. Coupon Rate: What's the Difference?

      Maturity of the bond. Coupon payments. Current Yield to maturity (discount factor) Need to weight present value of cash flows from bond by time received. In order for a bond to be protected from the changes in interest rates after purchase, the price risk and coupon reinvestment must offset each other.

      bond yield and coupon rate


    • [DOC File]Bond Market Interest Rates

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      The yield on the par bond equals its coupon rate, 8.75%. All else equal, the 4% coupon bond would be more attractive because its coupon rate is far below current market yields, and its price is far below the call price. Therefore, if yields do fall, capital gains on the bond will not be limited by the call price. ...

      bond price yield relationship


    • [DOC File]Bond Yields and Prices

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      Three years from now, the bond will be selling at the par value of $1,000 because the yield to maturity is forecast to equal the coupon rate. Therefore, total proceeds in …

      yield to maturity vs coupon


    • [DOC File]1

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      a. coupon rate on a bond multiplied by the face value of the bond. b. par value on a bond divided by the face value of the bond. c. par value on a bond minus the face value of the bond. d. coupon rate on a bond minus the face value of the bond. ANSWER: a . 37. If a bond is sold at a discount from par, this. a. lowers the yield on the bond.

      current yield on bonds


    • [DOC File]CHAPTER 14: BOND PRICES AND YIELDS

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      A bond's yield is its annual interest rate (coupon) divided by its current market price. There is an opposite relationship between a bond’s yield and its price. When interest rates rise, bond prices fall (they are sold at a discount from their face value) and their yields rise to …

      coupon vs current yield


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