× Didn't find what you were looking for? Ask a question
Top Posters
Since Sunday
c
5
j
5
a
5
L
5
f
5
j
5
D
4
k
4
y
4
t
4
h
4
l
4
Home Q & A Board Other Fields Homework Help Business Finance
New Topic  
Aleja Aleja
wrote...
Go to Answer
Posts: 104
Rep: 0 0
6 years ago
A bond’s yield depends on several factors; one of those factors is risk. So, how do you assess a bond’s risk? For bonds, it is quite simple. Prior to a bond being issued, external rating agencies assign a credit rating that helps the investment banker “price” the issue, or set the coupon rate. Coupon bonds are typically “priced” to sell at par value at issuance. However, over time, the market rate of interest may change, or the risk of the company issuing the bond may change. When either of those factors change, the price of the bond will change and therefore change the yield to maturity of that bond for any investor buying the bond on the secondary market.
Go to the following site and look at bond ratings.

http://www.bondsonline.com/Bond_Ratings_Definitions.php

1. What is Standard & Poor’s highest bond rating and how does it impact coupon rates and the bond’s selling price?

2.  What would happen to the price of that bond if market rates of interest increased over the next two years?

3. How much would new issue bonds sell for with AAA ratings after interest rates increased?
Read 58 times
1 Reply
Reading and Writing About Contemporary Issues
Replies
Answer verified by a subject expert
shangshangshangshang
wrote...
#1
Posts: 110
Rep: 48 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
This verified answer contains over 150 words.

Related Topics

Aleja Author
wrote...

6 years ago
Brilliant ツ
DaiwalkerX
wrote...

Yesterday
this is exactly what I needed
smi3
wrote...

2 hours ago
This calls for a celebration Person Raising Both Hands in Celebration
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  860 People Browsing
 143 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 584
  
 306
  
 66
Your Opinion
Which industry do you think artificial intelligence (AI) will impact the most?
Votes: 379
Previous poll results: What's your favorite coffee beverage?