Answer-Which of the following statements about bonds is true?

Explanation When a bonds coupon rate equals the required market return, there is no premium or discount, so the price equals its par face value. This holds regardless of maturity, assuming no call or put features.

Question

Which of the following statements about bonds is true?

A If the coupon rate equals the required return, the bond’s price equals its face value.

B For a discount bond, the coupon rate is greater than the required return.

C The yield to maturity (YTM) is always equal to the coupon rate at issuance.

D When interest rates rise, the prices of existing bonds increase.

E Callable bonds have lower yields compared to similar non-callable bonds.

Practice Next

More Current Financial Awareness Questions

As per Union Budget 2025-26, what is the revised credit guarantee cover for startups under the government’s initiative?
Dr. G Hemaprabha was appointed as the Director of the ICAR-Sugarcane Breeding Institute on the recommendation of Agricultural Scientists Recruitment Board...
How much provision is required for an asset which is there in a doubtful category upto 12 months?
Which of the following fintech firm became the first online bond platform provider to receive a debt brokerage license from SEBI?
The provisioning norms for Standard assets which are Farm Credit to agricultural activities, individual housing loans and Small and Micro Enterprises (SMEs...
Which pension scheme restricts participation of income tax payers from October 1, 2022?
RBI has extended the deadline for NBFCs to adhere to new NPA (Non performing assets) recognition norms to :
The Reserve Bank of India Governor Shaktikanta Das-headed Monetary Policy Committee and has decided not to raise the repo rate, keeping it at 6.5%.In addi...
Hope Ltd made total sales of Rs.500,000 of which 70% were credit sales. ABC Ltd reported gross profit of Rs.200,000 that year. If the opening and closing i...
As per World Cooperative Monitor, IFFCO is the no. 1 cooperative in the world. Who launched the WCM?

Hey! Ask a query

Which of the following statements about bonds is true?

Detailed Solution

More Current Financial Awareness Questions

Hey! Ask a query

Please Register/Login