Please help me with the following question, there is only one option that is correct. Please also explain why is the opt
Posted: Sun Apr 17, 2022 6:19 pm
Please help me with the following question, there is only one
option that is correct. Please also explain why is the option
correct and other options are wrong.
QUESTION 1 The following (semi-annual coupon) bond price quotes are representative over-the-counter quotations as of 3 PM EST. Issuer Coupon Rate (%) Maturity Month / Year Bid Ask Ask Yield (%) Collegetown Bagel Co. 6.125 April / 2027 (а. 137.3203 2.225 Apolo Food Inc. 6.125 April / 2027 (b) (d) Credit Rating AAA BB Which of the following statement(s) is CORRECT according to the above? (Both bonds are in the same market and are not callable nor prepayable.) i. (d) > 6.125 ii. (b) < 137.3203 iii. Macaulay duration of Apolo Food Inc.'s bond should be higher than that of Collegetown Bagel. iv. If investors in this market generally prefer safer fixed income assets, it is more likely that 137.3203 - (a) < (b) - (c) O i and ii ji and iv O i, ii and iii O ii, iii and iv
option that is correct. Please also explain why is the option
correct and other options are wrong.
QUESTION 1 The following (semi-annual coupon) bond price quotes are representative over-the-counter quotations as of 3 PM EST. Issuer Coupon Rate (%) Maturity Month / Year Bid Ask Ask Yield (%) Collegetown Bagel Co. 6.125 April / 2027 (а. 137.3203 2.225 Apolo Food Inc. 6.125 April / 2027 (b) (d) Credit Rating AAA BB Which of the following statement(s) is CORRECT according to the above? (Both bonds are in the same market and are not callable nor prepayable.) i. (d) > 6.125 ii. (b) < 137.3203 iii. Macaulay duration of Apolo Food Inc.'s bond should be higher than that of Collegetown Bagel. iv. If investors in this market generally prefer safer fixed income assets, it is more likely that 137.3203 - (a) < (b) - (c) O i and ii ji and iv O i, ii and iii O ii, iii and iv