Stocks Questions Answers 2022

Running head: STOCK
Stock
Name of the Student:
Name of the University:
Author Note:

STOCK
Table of Contents
Answer 1:...................................................................................................................................3
Part a:.....................................................................................................................................3
Part b:.....................................................................................................................................3
Answer 2:...................................................................................................................................4
Answer 3:...................................................................................................................................4
Part a:.....................................................................................................................................4
Part b:.....................................................................................................................................5
Answer 4:...................................................................................................................................6
Part a:.....................................................................................................................................6
Part b:.....................................................................................................................................7
References:.................................................................................................................................9

STOCK
Answer 1:
Part a:
The difference among the loan and bond taken by the company is that the loan is
provided by the bank to the company, while the bonds are issued to investors. The loans can
be of fixed rate of interest or variable rate of interest, while the bond has a fixed rate of
coupons. The loan is provided by the bank and can be changed when proceeded to another
bank, while the bonds can be bought and sold in the bond market.
Part b:
Part i: The price of the bond after 1st two coupons is 1033.67
Part ii: The price of the bond after ten coupon is 1021.06
Part iii: The price of the bond after 18 coupon is 1004.77
Part iv: The price of the bond after 20 coupon is 1000
Part v: The price of the bond after 1st two coupons is 967.70. The price of the bond after ten
coupon is 979.47. The price of the bond after 18 coupon is 995.27. The price of the bond after
20 coupon is 1000.
Part vi:
The bond price have been greater than the par value of the bond when the yield is less
than the coupon rate. Also the bond price is lower than the par value when the yield is greater
than the coupon rate. Thus, with the passing of time, the bond price move towards the par
value of the bond and at the maturity of the bond the bond price is equal to the par value of
the bond.