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Question on floating debt and investors:
"Floating rate debt is popular with investors who are worried about the risk of rising interest rates, because the interest paid on such bonds increases whenever market rates rise. This stabilizes the market value of the debt, and it also provides institutional buyers, such as banks, with income that is better geared to their own obligations."
Investors refer to people holding the bond, so why would they be worried by rising interest rates? That's more money they get every 6 months.
Logic of bonds:
Microdrive issues bond for $1000 -> An person buys the bond for $1000 (par value) -> paid interest every 6 months (coupon payment) to a person -> at the very end, $1000 is paid back (the prinicipal).
A person in this case is the investor. Explaination would be appreciated.
What amount of the $19,000 interest expense on the new loan can Kris deduct in year 4 on the new mortgage as home related interest expense?
Aaron, Bradford and Charles have been friends since childhood. At the high school graduation ceremony they decided to make a bet about who would be the fastest to save $50,000. Exactly 10 years later they met at the first high school reunion. The ann..
Compare and contrast the two companies in terms of how well or how poorly they are performing in the areas of profit, debt, and asset turnover.
what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged?
A bond that matures in 10 years sells for $1,190. The bond has a face value of $1,000 and a yield to maturity of 9.7489%. The bond pays coupons semiannually. What is the bond's current yield?
The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
Which of the following accounts does not belong in the equity section of a balance sheet?
BSW Corporation has a bond issue outstanding with an annual coupon rate of 7.8 percent paid quarterly and four years remaining until maturity.
Bulldog, Inc,has bought British pound call options at a premium of $.015 per unit, and an exercise price of $1.569 per unit.
A bank is in the midst of a highly competitive market environment and over the past few years has created. What concept best describes is a good example of the issues facing this risk manager and why?
Which of the following risks of a stock are likely to be firm-specific, diversifiable risks, and which are likely to be systematic risks? Which risks will affect the risk premium that investors will demand?
A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below. Project S: -1,500 (Year 0), 1000 (Year 1), 560 (Year 2), 50 (Year 3). Project L: -1,200 (Year 0), 0 (Year 1), 600 (Year 2), 1,500 (Year 3). The company..
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