Explain why the yield-to-maturity on a junk bond is not a particularly good measure of the return
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 77% (9 reviews)
Junk bonds represent a significant probability of default The YTM is the r...View the full answer
Answered By
Sheikh Muhammad Ibrahim
During the course of my study, I have worked as a private tutor. I have taught Maths and Physics to O'Level and A'Level students, as well as I have also taught basic engineering courses to my juniors in the university. Engineering intrigues me alot because it a world full of ideas. I have passionately taught students and this made me learn alot. Teaching algebra and basic calculus, from the very basics of it made me very patient. Therefore, I know many tricks to make your work easier for you. I believe that every student has a potential to work himself. I am just here to polish your skills. I am a bright student in my university. My juniors are always happy from me because I help in their assignments and they are never late.
4.90+
14+ Reviews
24+ Question Solved
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
Question Posted:
Related Video
The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel
Students also viewed these Corporate Finance questions
-
You have been told that the yield to maturity on 3-month treasury bills is 4% and t he current inflation rate is 2%. Estimate the real rate of interest.
-
The yield to maturity on a bond can be calculated using the IRR function. Enter the bond price as a negative number, and the coupons (on a semiannual basis) and maturity value as cash flows. Use the...
-
Why would you want to know the yield to maturity of a bond?
-
Which of the following statements about close buyer-seller relationships in business markets is FALSE? Long-term commitments on larger order quantities often cause the supplier to raise its selling...
-
Explain how e-business (e-commerce) is affecting international business.
-
After liquidating noncash assets and paying creditors, account balances in the Carla Vista Co. are Cash $19,100; A, Capital (Cr.) $7,800; B, Capital (Cr.) $6,500; and C, Capital (Cr.) $4,800. The...
-
Find the positive z-score for which 70% of the distributions area lies between -z and z. Find the indicated z-score.
-
On January 1, 2017, Delta Inc. acquired 80% of Sigma Company's outstanding stock for $80,000 cash. Following are the balance sheets for Delta and Sigma immediately before the acquisition, as well as...
-
2. Write a shell script program that uses to print the entire pyramid (shown below). To print the left and right parts of the pattern, use nested loops.
-
Tele Telcom, Inc. is a medium-sized company that produces automotive parts. The company has been in business for over 50 years and has a workforce of approximately 500 employees. Recently, some...
-
Explain why municipal bonds can offer lower interest rates than equally risky corporate bonds.
-
Go to stockcharts.com/freecharts/yieldcurve.html and click on the animated yield-curve graph (be sure JAVA is enabled on your browser). Answer the following questions: a. Is the yield curve typically...
-
Simplify. x + 2x 6 - 3
-
Zudo Furniture produces living room sets in its three factories, and then ships the sets to two depots. Then, these sets are shipped from depots to three stores. The network model of this supply...
-
why and how research-based instructional strategies are important given the environment of education today.
-
Write a Letter format to request to generate new credit report and to apply for new credit card as well.
-
Quotations for the M&B Corporation are listed as follows: .............................................CALL.............PUT Closing.....Strike....EXP...Premium.....Premium 50.5 ............ 52.0...
-
A person acquires a new credit card and uses it to purchase goods costing 2 5 0 per month. At the end of each month the following events happen in the order given: 1 . The 2 5 0 spent that month is...
-
We want to explore the ability of Newtons method to find roots to the equation sin(x) = 0. You should already know the roots of this equation. Write a MATLAB program that determines the roots of the...
-
Catherine (aged 42) and Johnson (aged 45) have been married for 12 years. Johnson is a project manager of an event company at a monthly salary of $55,000 with an additional one-month salary of...
-
Why do analysts sometimes use retail spending as a factor in measuring market demand for a sport facility? What are the pros and cons of using it?
-
When a pharmaceutical company develops a new drug, it often receives patent protection for that medication, allowing it to charge a higher price. Explain how this public policy of providing patent...
-
What was the change in Global Conglomerates book value of equity from 2011 to 2012 according to Table 2.1? Does this imply that the market price of Globals shares increased in 2012? Explain.
-
Use EDGAR to find Qualcomms 10K filing for 2011. From the balance sheet, answer the following questions: a. How much did Qualcomm have in cash, cash equivalents, and marketable securities (short and...
-
Required Information [The following Information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago...
-
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor...
-
Correlle dishes are known for being mostly unbreakable in daily use. Kevin's 12-year-old son decided to test this "unbreakable" idea by throwing a plate hard onto the floor. It broke. what this is an...
Study smarter with the SolutionInn App