• The bond value of a bond depends on the following factors: coupon or interest rate, yield to maturity, face value, and
Posted: Sun May 29, 2022 6:06 pm
• The bond value of a bond depends on the following factors:
coupon or interest rate, yield to maturity, face value, and
maturity or duration. In the primary market, these factors
determine the price of the bond. In the secondary market, the value
of the bond is determined by factors such as the creditworthiness
of the issuing corporation, cash flow, and the timing of the next
coupon payments.
a)Explain the following concepts related to bonds in one
or two sentences: Yield to maturity (YTM), Coupon rate (C), Par
value or face value (P), and years to maturity (tenor, n).
b) A 5 years corporate bond has a par value of $ 1,000, coupon
rate is 7% and YTM is 10%. Calculate the bond price.
coupon or interest rate, yield to maturity, face value, and
maturity or duration. In the primary market, these factors
determine the price of the bond. In the secondary market, the value
of the bond is determined by factors such as the creditworthiness
of the issuing corporation, cash flow, and the timing of the next
coupon payments.
a)Explain the following concepts related to bonds in one
or two sentences: Yield to maturity (YTM), Coupon rate (C), Par
value or face value (P), and years to maturity (tenor, n).
b) A 5 years corporate bond has a par value of $ 1,000, coupon
rate is 7% and YTM is 10%. Calculate the bond price.