1. Questions

Economics

Two investors are each issued one bond with the same face value, maturity date, and yield. After both bonds have reached maturity, it is discovered that one of the bondholders received a greater total return on her investment. If all expected payments were received, which of the following could explain the difference in return?

a.) One of the bonds was sold at face value while another was sold below face value.
b.) One of the bonds was a municipal bond while the other was a savings bond.
c.) One of the bonds was a corporate bond while the other was a savings bond.
d.) One of the bonds earned a greater interest payment than the other.

I think its either b or d. I'm not sure though.

  1. 👍
  2. 👎
  3. 👁
  4. ℹ️
  5. 🚩
HELP PLS

  1. Its A. i just turned it in

    1. 👍
    2. 👎
    3. ℹ️
    4. 🚩
    krew

  2. Answers:
    1. Junk bonds
    2. $510
    3. Money market
    4. An investor sells a bond to another investor
    5. One of the bonds was sold at face value while the other was sold below face value.

    1. 👍
    2. 👎
    3. ℹ️
    4. 🚩
    Destieltrash

  4. Destieltrash is right, for 2 simply multiply the face value by the percentage raised or decreased raised is for example 1.05 and for decreased for example 0.005 is the right way to do it.

    1. 👍
    2. 👎
    3. ℹ️
    4. 🚩
    science nerd

  5. sorry I meant 1.005 for the increase

    1. 👍
    2. 👎
    3. ℹ️
    4. 🚩
    science nerd

Respond to this Question

First Name

Your Response

Similar Questions

  1. finance

    The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5 percent. Which one of the following statements is correct if the market yield suddenly

  2. Finance

    A bond has a $l000 par value, l0 years to maturity, a 7 percent annual coupon, and sells for $985. a. What is its current yield? b. What is its yield to maturity c. Assuke that the yield to maturity remains constant for the next 3

  3. FINANCE

    Yield to call Six years ago, the Singleton Company issued 20-year bonds with a 14 percent annual coupon rate at their $1,000 par value. The bonds had a 9 percent call premium, with 5 years of call protection. Today, Singleton

  4. Finance

    Zeta Corporation has issued a $1,000 face value zero-coupon bond. Which of the following values is closest to the correct price for the bond if the appropriate discount rate is 8% and the bond matures in 8 years?

  1. Fiance

    What must be the price of a $10,000 bond with a 6.5% coupon rate, semi-annual coupons, and two years to maturity if it has a yield to maturity of 8% APR?

  2. Finance

    Bond value and time--Constant required returns Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain

  3. Finance

    A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.

  4. Accounting

    On August 31,2010, Chickasaw Industries issued $25 million of its 30-year, 6% convertible bonds dated August 31, priced to yield 5%. The bonds are convertible at the option of the investors into 1,500,000 shares of Chickasaw's

  1. finance

    the corner grocer has a 7-year, 6 percent annual coupon bond outstanding with a $1,000 par value. the bond has a yield to maturity of 5.5 percent. Which one of the following statements is correct if the market yield suddenly

  2. Finance

    Miller Corporation has a premium bond making semiannual payments. The bond pays an 8 percent coupon, has a YTM of 6 percent, and has 13 years to maturity. The Modigliani Company has a discount bond making semiannual payments. The

  3. Math

    Go to Table 10-1 which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 11 percent to 8 percent: A. What is the bond price at 11%? B. What is the bond

  4. Finance

    Which of the following statments is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par. The premium bond must have a lower current

View more similar questions or ask a new question.