. How is the value of a bond determined?

Q: determine the current market value of the bond.

A: Bond valuation is a method of finding the fair value of the bond. Fair value means the present…

Q: What is investment-grade bond?

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: what does the bond rating depend on?

A: It is a credit rating which represents the creditworthiness of both the corporate and the government…

Q: In general, how is the rate on a floating-rate bond determined?

A: The bond that changes in interest entirety in line with market interest rates or a few other…

Q: What are some of the specific bond terms to understand the yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: Why consider bonds?

A: A bond can be described as the security or asset which provides secure income to the investor…

Q: What effect does collateral have on a bond's interest rate? What effect does subordination have on a…

A: There are various factors that impact a bond's price. We discount back the future cash flows of a…

Q: When a bond is issued, what is its present value?

A: The present value of the bond is the total of the present value of the bond's interest payments that…

Q: What are the contract rate and the market rate for bonds?

A:

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: What are income bonds and indexed bonds?

A: The income bond is a type of debt instrument wherein the borrower is relied upon to pay just the par…

Q: Why is a call provision advantageous to a bond issuer?

A: Bonds: A bond, also recognized as a static-income security, is a debt instrument shaped for the…

Q: What is the carrying amount of a bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: How is the price of a bond (or bond issuance) determined?

A: solution concept coupon rate of bond               The coupon rate of the bond is the stated…

Q: immunization of a bond portfolio

A: Immunization is a risk-reduction approach that aligns asset and liabilities duration to protect…

Q: what is the difference between an investment grade bond and a junk bond?

A: Solution:- There are various companies like S&P etc, which give credit ratings to the companies…

Q: How does bond duration and bond convexity complement each other in measuring a bond portfolio’s…

A: Interest rate risk-It is the risk that arises for the bondholders from a volatile interest rate term…

Q: What is a bond payable?

A: Long-Term LiabilitiesLong-term liabilities are the obligations of the business that need not be paid…

Q: How does the carrying value of a bond gets amortized when selling it at discount?

A: The carrying value of bond represents the amount of Bond Face Value + unamortized premium (or )–…

Q: What is new issue bond?

A: The bond is a fixed income financial instrument that is issued by the government or by the companies…

Q: Define capital gains yield (on a bond)

A: The formula to compute capital gain yield as follows:

Q: What is a term bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is the market rate on a bond?

A: Definition:   Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by…

Q: what is the current yield of the bond?

A: Current Yield of Bond: it is can be said as the yield obtained by a bond on current price or how…

Q: What is return formula for bond?

A: Solution-      Bonds-                  A bond is a fixed financial gain instrument that represents a…

Q: How is the price determined for a bond (or bond issue)?

A:

Q: What is a discount bond? A premium bond?

A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…

Q: What is outstanding bond?

A: Bond: It can be defined as the loan given to a business or any other organization by the investor…

Q: What are bond issue costs? What is an underwriter?

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…

Q: What is general obligation bonds?

A: Bonds: A bond, also recognized as a fixed-income security, is a debt instrument shaped for the…

Q: what are treasury-indexed bonds?

A: Treasury Indexed Bonds are medium to long term securities for which the security's capital worth is…

Q: link between the price of bonds and the rate of interest?

A: There is a inverse relationship between price of bonds and rate of interest.  If interest rate…

Q: What is a clean and dirty price of a bond?

A: SOLUTION:- The clean price of a bond refers to the price which does not includes accrued interest.…

Q: How does collateral affect the interest rate on a bond? How does subordination affect the interest…

A: The interest rate on a bond is affected by many factors like collateral, subordination, etc.

Q: What are the similarities and difference between bonds and notes?

A: Notes payable: Notes payable is a written promise to pay a certain amount on a future date, with…

Q: ences the bond market's interest rates

A: Step 1 Borrowing profits are strongly influenced by monetary policy—in particular, the interest rate…

Q: How does accrued interest on a bond affect the purchase price?

A: Interest on bond is normally paid semi annually. When a bond is transferred in between these…

Q: What steps would you take to purchase a bond and how would you secure a return?

A: Bonds are corporate debt units that are issued by firms and collateralized debt obligations as…

Q: What is a securitized Bond?

A: When the outstanding bonds are pooled together to form a new category of product and then is traded…

Q: What are the Pro's and con's of bonds?

A: The bonds are one of the most liquid and active financial instruments in the world. Bonds are…

Q: What is the difference between callable and putable bonds?

A: Bonds are debt instruments issued by a company that borrows from its lenders. They are issued at a…

Q: What are the methods of determining interest on bonds?

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: Discus factors affecting value of a bond

A: Bonds are financial instruments which provides fixed returns to its holders. Bonds actually have a…

Q: What are two important characteristics that determine the issuance price of a bond?

A: Following are the two characteristics that determine the issuance price of a bond: The riskiness of…