L'oreal bonds were issued at $80 and are now trading in the secondary market at the price of $110.Which of the following statements is NOT correct?A.A new investor, who buys the bond now, makes a capital gain of $0 at the time of purchase.B.The transaction brings $30 new funding to the issuer.C.The issuer records a loss, unrelated to the fluctuations in the secondary market.D.A new investor, who buys the bond now and plans to keep it until maturity date, expects to make a capital loss of $10.E.An investor, who bought the bond at issue and sells it now, makes a capital gain of $30.

Anna buys a bond in the secondary market at $100 and waits for the bond to reach its maturity date.Which of the following statements is NOT correct?A.She pays $100 to another investor in exchange for the bond.B.She will receive $100 from the company that had borrowed money.C.She will NOT make any capital gain or loss.D.Her investment is not risky as she does not make any capital loss.

Which of the following statements is NOT correct?A.A bond is created in the primary market.B.An investor selling the bond to another investor is victim of a capital loss if he/she resells the bond at a lower price than it bought it.C.When the investor waits for the bond to mature at redemption date there is no capital loss.D.A bond is traded among investors in the secondary market.

L'Oreal, a beauty product company, issues $100 face value bonds at the price of $60. The maturity of the bond is 2 years and the bond pays coupons every six months. Which of the following statement is NOT correct?A.At maturity date, when amortization is complete, the redemption value (ignoring the final coupon) to get rid of the bonds from the balance sheet will be $100.B.The change in equity at the time of each coupon payment due to amortisation alone is a gain of $10.C.The amortization value at the time of each coupon payment is $10.D.After 1 year and a half, after the payment of a third coupon, the value of the bond recorded in the balance sheet of L'Oreal is $90.E.At the time of each coupon payment, the value of the bond in the balance sheet increases by $10.

L'Oreal (bank account at Alpha Bank) issues $60,000 face value bonds for the price of $56,000; the bonds have a four year maturity and pay $5,000 coupons once a year. A third of the bonds are bought by Alpha Bank (transaction 1) while the other two thirds are bought by SuperManage, a managed fund banking at Beta bank (transaction 2).  a. Draw the variations in Alpha Bank's balance sheet due to the two transactions above. Use only one single balance sheet and indicate the number of the transaction to which it relate at the end of each entry between brackets  [example  Notes: + 700 (1) where (1) refers to transaction 1] .(2 marks)b. Conclude how the stock of bank deposits and the stock of central bank deposits in the financial system have changed as a result of these two transactions. Explain your answers.(1 mark)c. Draw how L'Oreal's balance sheet is changing at the time of the first coupons payment. Clearly distinguish between coupon payment and amortisation. Show the details of your calculation separately. What is the book value of the bonds issued after that transaction?

Which of the following statements describes capital loss?Multiple choice question.The loss suffered by the real estate who sells the property prior to the payback date of the full principal when the price of the property increasesThe loss suffered by the bondholder who sells the bond prior to the payback date of the full principal when the price of a bond fallsThe opportunity cost of holding money as an assetThe loss suffered by a money holder who doesn't deposit money in a bank account when the interest increases