0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What happen when the yield to maturity on a bond is greater than the coupon rate?
When the yield of a bond exceeds it coupon rate, the price will be below 'par' which is usually $100.
Is the current yield greater than the coupon rate for a discount bond?
yes
If you have a 10 percent coupon bond with 19 years left to maturity the bonds make annual payments and currently sells for 1102.05 what is the YTM?
A bond that pays 1 coupon(s) of 10% per year, that has a market value of $1,102.05, and that matures in 19 years will have a yield to maturity of 8.87%. What does it mean? Well, bond investors don't just buy only newly issued bonds (on the primary market) but can also buy previously issued bonds from other investors (on the secondary market). Depending on whether a bond on the secondary market is bought at a discount or premium, the actual rate of return can be greater or lower than the quoted annual coupon rate. This is why bond investors need to look at YTM, which measures the bond's yield from the day the investor buys it to the day it expires, when the principal is paid to the bondholder.
What is the relationship between the coupon rate and the YTM for premium bonds?
klk
When does coupon rate exceed coupon yield?
There are a lot of sites that provides coupon codes on online shopping or ordering food. I'm using CouponLocate.com that offers amazing coupons and cashback as well on your shopping. You can use that cashback as a free recharge. Try this once.
If a bond's yield to maturity exceeds its coupon rate does the bond's current yield must also exceed its coupon rate?
No......The price of the bonds will be less than par or 1,000.....
Is the coupon rate or yield rate paid on a bond?
Coupon rate
When market interest rates exceed a bond's coupon rate the bond will?
When market interest rates exceed a bond's coupon rate, the bond will:
What is the interest rate the bond issuer pays to the bondholder called?
The interest rate paid on a bond is known as the coupon rate. A $1,000 fixed rate bond with a 5% coupon rate purchased at par would yield $50 annually in interest payments.
Is zero coupon bond more sensitive to change in interest rate than fixed coupon bond?
The zero coupon bond is more sensitive to change in rate (inflation) because the market value is not based on a fixed coupon.
What is coupon rate?
Coupon rate is simply just the annual coupon payments paid by the issuer relative to the bond's face or par value.Coupon rate can be calculated by dividing the sum of the security's annual coupon payments and dividing them by the bond's par value. For example, a bond which was issued with a face value of $1000 that pays a $25 coupon semi-annually would have a coupon rate of 5%.Source: investopedia
How does a premium savings bond work?
A premium savings bond is simply a bond which trades at a coupon rate that is higher than the prevailing interest rate. This increased coupon rate will cause the bond to mature faster than it otherwise would.
What happen when the yield to maturity on a bond is greater than the coupon rate?
When the yield of a bond exceeds it coupon rate, the price will be below 'par' which is usually $100.
Difference enters bond's coupon interest rate the current yield y bond-holder's required rate of return?
Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?
What is the stated rate of interest if a bond is sold at 98?
This can't be answered without more information (ie coupon and term/maturity). However, the yield will exceed the coupon rate as the price is less than 100
What is a contractual interest rate on bond referred as?
The "Coupon"
When a bonds yield to maturity is greater than the bonds coupon rate the bond?
When the yield of a bond exceeds it coupon rate, the price will be below 'par' which is usually $100.
