Give three reasons why the maturity of a bond is important
What will be an ideal response?
The three reasons as to why the maturity of a bond are as follows. First, the maturity gives the time period over which the holder of the bond can expect to receive the coupon payments and the number of years before the principal will be paid in full. Second, the maturity is important because the yield on a bond depends on it. The shape of the yield curve determines how the maturity affects the yield. Third, the price of a bond will fluctuate over its life as yields in the market change. The volatility of a bond's price is dependent on its maturity. More specifically, with all other factors constant, the longer the maturity of a bond, the greater the price volatility resulting from a change in market yields.
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When the exchange rate (dollars per pound) falls, the
a. quantity of pounds supplied decreases. b. quantity of pounds supplied increases. c. supply curve of pounds shifts rightward. d. supply curve of pounds shifts leftward.
Lassen Corporation issued ten-year term bonds on January 1, 20x5, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. The entry to record the bond interest expense on the
first interest payment date is: (Round answer to the nearest dollar.) A) Bond Interest Expense 24,000 Cash 24,000 B) Bond Interest Expense 27,638 Unamortized BondDiscount 3,638Cash 24,000 C) Bond Interest Expense 27,638 Cash 27,638 D) Bond Interest Expense 27,638 Unamortized BondDiscount 27,638
What is an indenture agreement?
What will be an ideal response?
______ is typically described as the willingness of individuals to exert effort toward a goal.
Fill in the blank(s) with the appropriate word(s).