Discus about Bond valuation in respect to Yield to maturity and Bond Duration.

Q: bond

A: Convexity can be defined as a measure which explains the relationship between price & yield of…

Q: Define Bond Premium

A: Bond premium: It is the amount because of which the purchase price of bond is more than the par…

Q: What impact do interest rates have on bond prices? What are the basic assumptions that go into…

A: This question explains about the fundamental assumptions that go into establishing the value of a…

Q: What is the relationship between bond prices and interest rates? Describe the process of…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

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: Is current yields affected by whether the bond is callable ?

A: A callable bond is a bond where the institution that issues the bond has the option to prematurely…

Q: Explain the principle of immunization when used with a bond portfolio. Explain how these bond risk…

A: The principle of immunization when used with a bond portfolio is as follows:The secondary market…

Q: The amortization on a bond premium:

A: The amortization on a bond premium: (d) Is calculated by multiplying the bond’s carrying value by…

Q: Explain why yields, investment objectives, risk profiles, knowledge, and timing the market serve as…

A: Bonds are the financial instruments that represent promises from a borrower to a lender of paying…

Q: the formula for obtaining the gross yield on a bond.

A: Bond is the debt instrument issued by the borrowers to raise funds from various investors. Generally…

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: Define the following Bond related terms: Issue Date Face Amount Term Contract Rate Payment Frequency…

A: Bonds refers to the security issued by corporate companies or government as and when they need to…

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: Describe the characteristics of traditional bonds and contemporary bonds

A: Traditional bonds can be categorized in to two types, Secured and unsecured bonds. Bonds which have…

Q: Define capital gains yield (on a bond)

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

Q: compute yield-to-maturity for the following bonds

A: Yield to Maturity is the expected return to be earned on the bond when it is held till the date of…

Q: Explain the effect Serial Bonds have on risk from both the perspective of the bond issuer and from…

A: A Serial Bond is that bond issue in which there is maturity, at regular intervals, of a portion of…

Q: What is the relationship between bond prices and interest rates? Describe how this link came to be…

A: Bonds have an inverse relationship to interest rates. When the cost of borrowing money rises, bond…

Q: Define bond amortization.

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

Q: Define the following: Bond: Par Value: Maturity:

A: Given , To define the following terms:- Bond, Par value and Maturity.

Q: What is the difference between the yield to maturity of a bond and the realized yield?

A: Introduction: Depending upon the market conditions, yield at maturity is the market return expected…

Q: Discuss different types and characteristics of debt instruments with specific reference of Bonds.

A: Corporate bond- It is a bond issued by a company to fund its business operations, major expansions,…

Q: What is the straight-line amortization approach with regards to a bond discount or premium?

A: Bond with a straight-line amortization schedule: The straight-line amortization technique is a way…

Q: Explain the reasoning behind the bond-yield-plus-judgmental-riskpremium approach.

A: Approach under which judgmental risk premium is added into a yield on an entity that is owning the…

Q: What is the effective interest rate of a bond or other debt instrument measured at amortized cost?…

A: The effective rate is increased times the bond's value at the beginning of the accounting amount to…

Q: Summarize some specific bond terms?

A: A bond is nothing but a financial instrument that a company issues for raising capital. It is…

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: In regard to a bond discount or premium, what is the straight-line amortization method?

A: Straight-line amortization bondStraight line method of amortization is a process of amortizing…

Q: (                            ) is a measure of the sensitivity of the price of a bond or other debt…

A: Duration is measure of the sensitivity of the price of a bond or other debt instrument to change…

Q: What is the relationship between bond price and yield. Explain with an example and graphical…

A: A bond is a kind of debt financial instrument that is being issued by corporations and the…

Q: How do bond duration and bond convexity work together to assess the interest rate risk of a bond…

A: This topic discusses bond duration and bond convexity, which work together to estimate a bond…

Q: When a bond payable is measured using the fair value model, the interest expense is computed by…

A: Bonds can be defined as a financial instrument which provides regular interest income to its holder.…

Q: Define spread, bond yield

A: Spread: It is the difference in the two measurable units. It is mainly used in calculating the…

Q: Default risk on bonds can be evaluated by using: A. financial analysis B. bond ratings C. estimates…

A: Default risk is the risk that a borrower won’t be able to make required debt payments.

Q: Describe Debt Investments to Be Held to Maturity.

A:

Q: What is bond valuation? Give a detail explantion.

A: Answer

Q: What’s the logic behind the bond-yield-plus-risk-premium approach?

A: Bond yield plus a risk premiumAn approach that applies to an entity’s equity that is being traded…

Q: What relationship exists between bond prices and interest rates? Explain how you came to make this…

A: Bond price: The present discounted value of a bond's future cash flow is known as the bond price.…

Q: Explain the relation between the bond value and yield of a Bond

A: The bond is a debt instrument that is issued by the organization to raise the funds from the…

Q: a. Explain the impact on the offering yield of adding a call feature to a proposed bond issue.b.…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

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: Please explain the terms associated with the bonds, namely, corporate bond, municipal bond ,…

A: Corporate Bonds: These are the bonds which are issued by company’s in order to fund for any new…

Q: The rate of interest actually earned by bondholders is called the Select one: O a. effective rate. O…

A: Solution Concept If the coupon rate of bond is greater than the market rate of interest , bond is…