Explain the yield on high-coupon Bonds more likely to be higher than that on low-coupon Bonds when the term Structure is upward-sloping or when it is Downward-sloping.

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Question 1:

1. Why is a cash flow statement prepared?
2. What is included in the statement of cash flows?

Question 2:

Watch the following video that describes the basics of project management.

Tell us a few examples of projects you encountered in your personal or professional life and how you would have handheld them differently now that you know some notions on project management.

Question 3:

(Q19) Is the yield on high-coupon bonds more likely to be higher than that on low-coupon bonds when the term structure is upward-sloping or when it is downward-sloping? Explain

Make your contribution onto Kristian and Maricel’ discussions:

Kristian:
Spot interest rates and yields. Which comes first in the market for U.S. Treasury bonds:

Spot interest rates or yields to maturity?
Bond prices or yields to maturity?
Spot interest rates before yields to maturity because spot interest rates determines the price, which is needed to determine YTM.
Price before yields to maturity because price is needed to determine YTM.

Maricel:
Prices and yields A six-year government bond makes annual coupon payments of 5% and offers a yield of 3% annually compounded.
Given Assumptions 1:
Nper 6 yrs
Face Value $ 1,000 example
Coupon Rate 5%
Coupon Interest $ 50
Coupon Yield 3% annually

Calculate the Present Value of the Bond $1,108.34 A

Suppose that one year later the bond still yields 3%. What return has the bondholder earned over the 12-month period?
Given Assumptions 2 (one yr after):
Nper 5 yrs annuity factor
Face Value $ 1,000 example
Coupon Rate 5%
Coupon Interest $ 50
Coupon Yield 3% annually

Calculate the Present Value of the Bond $1,091.59 B

The return has the bondholder 3.00%

Now suppose that the bond 2% at the end of the year. What return would the bondholder earn in this case?
Given Assumptions 3:
Nper 5 yrs annuity factor
Face Value $ 1,000 example
Coupon Rate 5%
Coupon Interest $ 50
Coupon Yield 2% annually

Calculate the Present Value of the Bond $1,141.40 C

The return has the bondholder 7.49%
(over 12-month period)

Question 4:

Based on the

Based on the video, discuss with your peers the idea to apply neuromarketing tools in the market research.

 

 

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