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- which of the following is a government bond that is repaid within 2-10 years? a Treasury note b Treasury bond c Treasury bill d Treasury cardThe Federal Reserve decides to buy bonds and there is a change in the equilibrium bond price. What bond price is most likely? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a not enough information b 940 c 950 d 960What is a bond? A certificate representing a loan from an investor to a corporation or government entity that makes fixed payments for a set time and eventually pays back the loan in full. A certificate of ownership in a corporation with the right to a percentage of the earnings. A payment for an investor to a corporation for the rights to future profits. A group of stocks sold together for a set price.
- What type of bond is issued by state and local governments? Is there any risk that state and local governments might default on these bonds? What special feature do these bonds have that make them particularly attractive to certain taxpayers?Interest rate risk; a. is the risk that a bond's coupon rate may change over time b. is lesser for bonds with a longer term as compared to bonds with a shorter term c. is zero on the date of maturity of a bond d. is the risk that the market interest rate may remain constantCalculate the accrued interest (in $) and the total purchase price (in $) of the bond purchase. (Round your answers to the nearest cent.) Time Coupon Market Accrued Commission Bonds Total Company Since Last Rate Price Interest per Bond Purchased Price Interest Company 2 9.7 79.75 23 days $ $9.55 15 $
- A _________ is a share of a corporation that may be bought and sold.A bond's yield is a periodic fixed payment made to a bondholder expressed as a percent of its face value. the current annual return to a bond. the date when the face value must be paid to the bondholder. the amount that must be repaid to the bondholder upon its maturity.9. Duration is an accurate measure of the relationship between percentage changes in a bondprice and changes in its yield.
- The relationship between a bond and its price is easier to determine than the relationship between a stock and its price.True or FalseWhen the price of a bond equals the face value: a. The yield to maturity will be below the coupon rate b. The yield to maturity is greater than the current yield c. The yield to maturity will be above the coupon rate d. The current yield is equal to the coupon rate(a) You are selling your home, which has a large mortgage with favourable rates. You want to know whether a new purchaser can assume this mortgage. (i) Explain when assumption of a mortgage may occur, and also discuss whether you could bear any liability if the mortgage is assumed. (ii) Would novation of the mortgage be a better idea? Explain what novation is, when it may occur, and any liability you may face. (b) You are able to sell your property and now your financial advisor suggests that you should invest your new windfall in mortgages. He lists the various types of mortgages available. Discuss at least three different types of mortgages, relating their advantages and disadvantages from a legal standpoint, in particular with respect to the security involved. 4.