HELPPP Bond prices are determined by which of the following?

Term to maturity multiplied by the bond rating ratio

b. None of the choices provided here are true

c. The future value of the face value

d. The present value of the coupon payments

e. The present value of the coupon payments and face value

second question:

Which of the following is not true of bonds?

1. They are a means for companies to raise capital

2. They are typically safer than stocks

3. They make a bond purchaser a creditor to the company

4. All of the above are true

5. They have a finite life cycle

Third question:

Which of the following types of bonds is sold at a discount from face and does not pay coupon payments?

a. Regular bonds

b. Aggregate bonds

c. Passive bonds

d. Zeroes

e. None of the choices provided here are true

THE THIRD question could be in MULTIPLE answers!

thank youu

3 Answers

  • JoeyV
    Lv 7
    9 years ago
    Favorite Answer

    Riham has this. I dunno what MSC is thinking that the face value of the bond does not determine its value. The value of a bond is the PV of its coupons and its face value where the discount rate properly accounts for risk.

  • msc
    Lv 6
    9 years ago

    1. The price of a bond is determined by the market, based on the attractiveness of the interest rate (coupon) and the creditworthiness of the bond issuer. A is false because it doesn't take the coupon into account. C and E are false because face value is not a factor at all. I suppose D could be true, if by "value" they mean attractiveness compared to other bonds

    2. All answers are true.

    3. Zeros (zero-coupon bonds). Instead of paying an interest rate, they offer a capital gain at the end of the term.

  • 9 years ago

    1 -e

    2 -4

    3 -d

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