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The following information pertains to bonds:
Further following information is available about a particular bond 'Bond F'
There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which corresponds to YTM of 9.22%. The following are the benchmark YTMs.
Assuming the G-Sec has not changed from the time January 2013 to April 2013, what can you predict about the changes bond price and change in issues borrowing rates:
Suggested Answer: D
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8 comments · newest first
CU
Curtis
1 year ago
This is confusing, are we sure about the trends?
MI
Mickie
1 year ago
Wait, how can prices increase if borrowing rates go up?
DE
Deane
1 year ago
Totally agree, option A makes sense!
MY
Myong
1 year ago
I think prices will decrease if rates go up.
RU
Rutha
1 year ago
Bond F has a YTM of 9.22%.
RE
Ressie
1 year ago
Hmm, I'm not sure about this one. I'm debating between A and B, but I'm a little confused on the difference between opportunity products with monthly schedules and formula fields. I'll have to think this through carefully.
GO
Goldie
1 year ago
Hmm, I'm torn between A and B. Response time matters, but actual communication quality seems more important.
DE
Derrick
1 year ago
Hmm, not sure about this one. Asset depreciation can get a bit tricky. I'll need to think through the options carefully.