What is the value of a bond? The sum of the coupon payments of the bond. The pre
ID: 2808133 • Letter: W
Question
What is the value of a bond?
The sum of the coupon payments of the bond.
The present value of its coupon payments plus face value.
The future value of its cash flows.
The face value of the bond plus coupon payments.
The face value of the bond.
None of the above
What is the highest grade of high yield bonds?
AAA
BBB
BB
C
CCC
None of the above
The sum of the coupon payments of the bond.
The present value of its coupon payments plus face value.
The future value of its cash flows.
The face value of the bond plus coupon payments.
The face value of the bond.
None of the above
What is the highest grade of high yield bonds?
AAA
BBB
BB
C
CCC
None of the above
Explanation / Answer
what is the value of a bond
Answer : Present value of coupon payments and face value
Explanation : To arrive at present value of bond, we have to discount the all future coupons and face value of debenture
what is highest grade of highest yield bonds
Answer : BB
Explanation : Till BBB, bonds are investment grade bonds, after that next is BB. They are termed as Junk bond or high yield bond. BB is the highest rating (THUMBS UP PLEASE)
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