Asume that one year after tealls bonds were issued going

Assignment Help Finance Basics

Reference no: EM13477489

1. One year ago, Teall Inc. issued a 20-year, 6% annual coupon bond at a par value of $1,000. Suppose, that one year after Teall's bonds were issued, the going interest rate had risen to 10%. At what price would the bonds now sell?

a. $665.40

b. $719.23

c. $845.98

d. $1,000.00

e. $1,188.75

2. Foreign bonds are issued by a foreign government or a foreign corporation. An additional risk exists when bonds are denominated in a currency other than that of the investor's home currency. True or false?

a. True

b. False

3. A 30-year, zero-coupon Treasury bond has more reinvestment risk than a 30-year Treasury coupon bond, but the zero-coupon bond has less price risk. True or false?

a. True

b. False

4. Suppose someone is planning to invest in bonds and thinks that inflation and consequently interest rates are likely to decline in the near future. The investor should buy either short-term, fixed-rate bonds or else floating-rate bonds rather than long-term, fixed-rate bonds. True or false?

a. True

b. False

5. Menninger Corp's bonds currently sell for $875 and have a par value of $1,000. They pay a $65 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,050. What is their YTM?

a. 7.75%

b. 8.32%

c. 9.41%

d. 10.66%

e. 11.59%

Reference no: EM13477489

Questions Cloud

Does firm appear to have effective corporate governance : loren seguara and dale johnson both work for sports products inc. a major producer of boating equipment and

Determine the required after-tax refunding investment : new york waste nyw is considering refunding a 50000000 annual payment 14 coupon 30-year bond issue that was issued 5

Explain the differences between conflict management as well : q define the differences between conflict management and anger management. how would you use each in order to help

Prepare a paragraphs that briefly explain your : your work as a management information consultant has led you to a long-term project working on a custom decision

Asume that one year after tealls bonds were issued going : 1. one year ago teall inc. issued a 20-year 6 annual coupon bond at a par value of 1000. suppose that one year after

Delivery demonstrates the ability to use appropriate word : organization demonstrates the ability to analyze content logically concisely and in an appropriate manner to

Which of the following is used to describe an individuals : question 1which of the following best describes capacity?capacity is limited.capacity is quantifiable .capacity is

Define the elements of the osha guidelines regarding : q explain the elements of the osha guidelines regarding workplace violence that can be adapted for use in construction

Upstate water company just sold a bond with 50 warrants : upstate water company just sold a bond with 50 warrants attached. the bonds have a 20-year maturity and an annual

User Account

All Pages