Finance 6

***** is the process that links risk and return in order to determine the worth of an asset valuation
The value of an asset is the ***** of all future cash flows it is expected to provide over a relevant time period present value
Risk is generally incorporated into the **** in the present value model discount rate
A bond will set at ***** if the required return is greater than the coupon rate a discount
The present value of a bond’s **** determines the value of the bond. coupon payment and maturity value
****** is/are long-term debt instruments used by business and government bonds
Interest rate risk and the time to maturity had a relationship that is best characterized as direct
As market rates increase the value of bond will ****, all other things equal. decrease
The longer the term a bond has before it matures, **** will be the affect on its value due to a 1% change in market interest rates the greater
The yield to maturity on a bond with a price equal to its par value will always be equal to the coupon rate
For an investor that plans to purchase a bond that matures in one year, the primary concern should be yield to maturity
The key inputs to the valuation process include cash flows (returns), the required return (risk) and timing
Corporate bonds usually have … a face value of $100, an initial maturity of 10-30 years, and semi annual interest payments
Which of the following is not like to be included in a bonds covenants call provision

Leave a Reply

Your email address will not be published. Required fields are marked *