# [Solved] Another Name for a Consol Is a ________ Because It

## Another name for a consol is a ________ because it is a bond with no maturity date. The owner receives fixed coupon payments forever.

A)perpetuity

B)discount bond

C)municipality

D)high-yield bond

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- Q54: If a $10,000 face-value discount bond maturing in one year is selling for $5,000,then its yield to maturity is A)5 percent. B)10 percent. C)50 percent. D)100 percent.
- Q55: If a $5,000 face-value discount bond maturing in one year is selling for $5,000,then its yield to maturity is A)0 percent. B)5 percent. C)10 percent. D)20 percent.
- Q56: A discount bond selling for $15,000 with a face value of $20,000 in one year has a yield to maturity of A)3 percent. B)20 percent. C)25 percent. D)33.3 percent.
- Q57: The yield to maturity for a discount bond is ________ related to the current bond price. A)negatively B)positively C)not D)directly
- Q58: A discount bond is also called a ________ because the owner does not receive periodic payments. A)zero-coupon bond B)municipal bond C)corporate bond D)consol
- Q60: Negative yields to maturity imply that bond purchasers are better off to hold cash. Acceptance of slightly negative yields by purchasers in recent times suggest that the A)convenience of storing large sums is also important to decisions. B)inflation rate is positive. C)governments have issued too many bonds. D)decision makers are only concerned with yields.
- Q61: If the interest rate is 5%,what is the present value of a security that pays you $1,050 next year and $1,102.50 two years from now? If this security sold for $2,200,is the yield to maturity greater or less than 5%? Why?
- Q62: The ________ is defined as the payments to the owner plus the change in a security's value expressed as a fraction of the security's purchase price. A)yield to maturity B)current yield C)rate of return D)yield rate
- Q63: Which of the following are TRUE concerning the distinction between interest rates and returns? A)The rate of return on a bond will not necessarily equal the interest rate on that bond. B)The return can be expressed as the difference between the current yield and the rate of capital gains. C)The rate of return will be greater than the interest rate when the price of the bond falls during the holding period. D)The return can be expressed as the sum of the discount yield and the rate of capital gains.
- Q64: The sum of the current yield and the rate of capital gain is called the A)rate of return. B)discount yield. C)perpetuity yield. D)par value.

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