Business, 26.03.2020 20:15 Jorjalilli8081

Which one of the following relationships is stated correctly? Multiple Choice The capital gains yield is equal to zero for a zero coupon bond. Increasing the coupon rate decreases the current yield, all else constant. Decreasing the time to maturity increases the price of a discount bond, all else constant. The coupon rate exceeds the current yield when a bond sells at a discount.

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Answer from: nicolehathaway1012

Decreasing the time to maturity increases the price of a discount bond, all else constant.

Explanation:

A discount bond is a bond that is issued for less than its par or face value. Discount bonds may also be a bond currently trading for less than its face value in the secondary market.

Yield to maturity considers the bond's current market price, par value, coupon interest rate, and time to maturity to calculate a bond's return.

Answer from: Quest

by knowing conditionality

explanation:

Answer from: Quest

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans.

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.

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