Asked by
Drameka Elder
on Dec 09, 2024Verified
All else equal, the market value of a corporate bond is always inversely related to its:
A) Coupon rate.
B) Time to maturity.
C) Yield-to-maturity.
D) Present value.
E) Future value.
Yield-to-maturity
The total return anticipated on a bond if the bond is held until it matures, accounting for interest payments and the difference between the purchase price and the par value.
Market Value
The trading price at which an asset or service can be currently bought or sold in the open market.
Coupon Rate
The interest rate stated on a bond at the issuance time, which the issuer promises to pay to the bondholder on the face value of the bond.
- Explain the factors that influence the market value of a bond.
Verified Answer
GA
Learning Objectives
- Explain the factors that influence the market value of a bond.