Activity 2: Q3) Which of the following statements is FALSE? A A bond trades at par when its coupon rate is equal to its yield to maturity. B A bond trades at premium when its coupon rate is greater than its yield to maturity. C A bond that has zero coupon rate is a discount bond. D If a coupon bond's yield to maturity exceeds its coupon rate, the present value of its cash flows at the yield to maturity will be greater than its face value. SUBMIT

Bond A has a coupon rate of 10% and a yield of 13%. Bond B has coupon rate of 5% and sells for the same price as Bond A. Both bonds have the same face value and maturity. From this, which of the followings is the most inappropriate statement? A. The yield of Bond B is greater than 5%. B. The yield of Bond B is less than 10%. C. Bond A is a discount bond. D. Both bonds are discount bonds.

Activity 2: Q1) Which of the following statements is FALSE? A Bond is a liability for issuer and an asset for holder. B By convention the coupon rate is expressed as an effective annual rate. C Bonds typically make two types of payments to their holders. D The time remaining until the repayment date is known as the term of the bond. SUBMIT

Which of the following statements about zero coupon bonds is FALSE? A. When the bonds mature, the issuing firm is faced with a small cash outflow relative to the cash inflow the firm receives when the bonds are initially issued. B. Zero coupon bonds have lower interest rate risk than bonds with high coupons. C. Zero coupon bonds are an extremely popular way for corporations to borrow money. D. Most zero coupon bonds in the U.S. are government issues.

Bond A is currently selling at par and has a yield of 5%. Bond B has the same coupon rate as A but is selling at a premium. Given this information, which of the following statements is correct.  Bond B's coupon rate is below 5%.  Bond B's coupon rate is above 5%.  Bond B's yield is below 5%.  Bond B's yield is above 5%.

Which one of the following statements is true regarding bond valuation?When r is greater than coupon rate, the bond is traded at parThe interest rate (r) and a bond's market price are irrelevant to each otherWhen r increases, the market value of the bond will decreaseWhen r is higher than coupon rate, the bond is called a premium bondWhen r increases, the face value of the bond will also increase