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- What accounts are affected when bonds are issued at face value?Discuss how the amount of time before a bond's maturity affects the link between market rates of interest and the price of the bond in question (if applicable).Discuss how does the length of time until maturity for a bond influence the relationship between market rates of interest and bond price.
- Default risk on bonds can be evaluated by using:A. financial analysisB. bond ratingsC. estimates of potential losses on bondsD. a and bDiscuss how the duration of a bond's maturity affects the link between market interest rates and the price of the bond.interest payment for bonds is calculated using the face value of the bonds and the __________ A. market value B. market interest rate C. stated interest rate D. original cost
- Please see attached. Definitions: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity.If bonds are redeemed on maturity date, any premium or discount a. Is carried forward and written off in the same manner as that used prior to the maturity date. b. Should be used to calculate the gain or loss resulting from the maturity of the bonds. c. Should be written off directly to a bond retirement account as the bond will be redeemed. d. Will be fully amortized as its amortization period is designed to coincide with the life of the bond issue.Which of the following types of debt securities protect investors against interest rate risk? a. extendible notes b. floating rate bonds c. floating rate bonds and extendible notes d. original issue deep discount bonds
- different types of risk that bond investors and issuers face, and discuss how a bond’s terms and collateral can be changed to affect its interest rateWhat is the relationship between bond price and interest rate? Describe in fully how this relationship was made. What approach may we use to calculate the bond's value based on the relationship?What is the relationship between bond prices and interest rates? Verbally describe how this relationship comes about. How can we use this relationship to estimate the value of a bond?