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Questions and Answers
- Eurosterling are
- Eurosterling are
- In one of leading banks in Sri Lanka received a Yen deposit. The technical terminology to recognize this deposit is,
- In one of leading banks in Sri Lanka received a Yen deposit. The technical terminology to recognize this deposit is,
- Coupon rate of the bond is 5% and the required yield expected by the market from the particular bond is 4.5%. this bond is
- Coupon rate of the bond is 5% and the required yield expected by the market from the particular bond is 4.5%. this bond is
- The coupon rate of a 3-year bond is 5%, its yield is also 5%. This bond is recognized as a.
- The coupon rate of a 3-year bond is 5%, its yield is also 5%. This bond is recognized as a.
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- The coupon rate of an 8-year bond is 6% while its current market yield is 5.6%. Its current market value can be,
- The coupon rate of an 8-year bond is 6% while its current market yield is 5.6%. Its current market value can be,
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- The coupon rate of a 10-year bond is 4.5% while its current market yield is 5.6%. Its current market value can be,
- The coupon rate of a 10-year bond is 4.5% while its current market yield is 5.6%. Its current market value can be,
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The current market value of a particular bond is at USD 100.00. Its yield is 4.6%. Which of the following can be its coupon rate.
The current market value of a particular bond is at USD 100.00. Its yield is 4.6%. Which of the following can be its coupon rate.
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The current market value of a particular bond is at USD 102.75. Its yield is 4.6%. Which of the following can be its coupon rate.
The current market value of a particular bond is at USD 102.75. Its yield is 4.6%. Which of the following can be its coupon rate.
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- Which of the following is an advantage to the issuer of a convertible bond.
- Which of the following is an advantage to the issuer of a convertible bond.
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Which of the following is an advantage to the investor of a convertible bond.
Which of the following is an advantage to the investor of a convertible bond.
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Study Notes
Eurosterling
- Represents British pound-denominated deposits and loans made outside the UK financial system.
Yen Deposit Recognition
- A deposit received in Yen by banks is referred to as a "Yen deposit."
Bond Yield and Coupon Rate Relationships
- A bond with a coupon rate of 5% and a required market yield of 4.5% is classified as a "premium bond" since it pays more than the market demands.
- A bond with a coupon rate of 5% and a yield of 5% is considered a "par bond," indicating its market value equals its face value.
- A bond featuring a coupon rate of 6% and a market yield of 5.6% can be estimated to have a market value greater than its face value due to its higher coupon rate.
- A bond with a coupon rate of 4.5% and a market yield of 5.6% has a market value below its face value, often defined as a "discount bond."
Current Market Value and Yield Calculation
- A bond with a current market value of USD 100.00 and a yield of 4.6% indicates a coupon rate likely around 4.6%, as it is valued at par.
- A bond valued at USD 102.75 with a yield of 4.6% suggests a coupon rate higher than 4.6%.
Convertible Bonds
- Issuers of convertible bonds benefit from lower interest rates and flexible financing options.
- Investors in convertible bonds gain potential appreciation through conversion into equity, offering downside protection with the bond's fixed income.
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