When the market’s required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:

Related Mcqs:

1. The value of conversion option to bond holder is $550 and the rate of return on non-convertible bond is $270 then rate of return on convertible bond is _________?

   A. 0.0204
   B. 2.04
   C. 280
   D. 820

2. The value of conversion option to bond holder is $220 and the rate of return on non-convertible bond is $350 then rate of return on convertible bond is _____________?

   A. 570
   B. 130
   C. 670
   D. 1.59

3. The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is ____________?

   A. 0.0137
   B. 1280
   C. 1.37
   D. 200

4. The value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is ___________?

   A. 1250
   B. 1150
   C. 1350
   D. 410

5. The value of option issued to call debt is $670 and return rate on callable bond is $540 then return rate on non-callable bond is ____________?

   A. 1210
   B. 1010
   C. 130
   D. 1020

6. The value of option issued to call debt is $940 and return rate on callable bond is $480 then return rate on non-callable bond is __________?

   A. 460
   B. 1520
   C. 1420
   D. 1620

7. If coupon rate is less than going rate of interest, then bond will be sold________?

   A. Seasoned par value
   B. More than its par value
   C. Seasoned par value
   D. At par value

8. The value of option issued to call debt is subtracted from rate of return on callable bond to calculate the rate of return on ____________?

   A. contributed bonds
   B. non-callable bonds
   C. callable bonds
   D. discounted bonds

9. If market interest rate falls below coupon rate then bond will be sold__________?

   A. Below its par value
   B. Above its par value
   C. Equal to return rate
   D. Seasoned price

10. If coupon rate is more than going rate of interest, then bond will be sold________?

    A. More than its par value
    B. Seasoned par value
    C. At par value
    D. Below its par value