Which of the following statements are most likely to be true? 1. The only factor that has an impact on a bond's price is its yield to maturity. II. Bond prices and market interest rates move in the...


Which of the following statements are most likely to be true?<br>1. The only factor that has an impact on a bond's price is its yield to<br>maturity.<br>II. Bond prices and market interest rates move in the opposite direction.<br>III. As time passes and a bond approaches its maturity date, its (ex-coupon)<br>price will converge to its face value.<br>Group of answer choices<br>I and Il only.<br>I and III only.<br>Il and III only.<br>I, Il and II.<br>3)<br>A company has a bank loan outstanding that requires it to make annual payments<br>of $1,000,000 at the end of each of the next three years. The bank has offered to<br>the company to skip the next two payments and instead make a single payment at<br>the end of the loan's term in three years' time. If the interest rate on the loan is 6%<br>p.a., compounded quarterly, the final payment that will make the<br>company indifferent between the two payment options is closest to:<br>Group of answer choices<br>$2,666,283.<br>$2,673,012.<br>$3,183,600.<br>$3,187,856.<br>2)<br>

Extracted text: Which of the following statements are most likely to be true? 1. The only factor that has an impact on a bond's price is its yield to maturity. II. Bond prices and market interest rates move in the opposite direction. III. As time passes and a bond approaches its maturity date, its (ex-coupon) price will converge to its face value. Group of answer choices I and Il only. I and III only. Il and III only. I, Il and II. 3) A company has a bank loan outstanding that requires it to make annual payments of $1,000,000 at the end of each of the next three years. The bank has offered to the company to skip the next two payments and instead make a single payment at the end of the loan's term in three years' time. If the interest rate on the loan is 6% p.a., compounded quarterly, the final payment that will make the company indifferent between the two payment options is closest to: Group of answer choices $2,666,283. $2,673,012. $3,183,600. $3,187,856. 2)

Jun 02, 2022
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