--%>

How would the market price of a bond be influenced

All other things held constant, how would the market price of a bond be influenced if coupon interest payments were made semiannually rather than annually?
Most of bonds issued in the United States pay interest semiannually (twice per year). Along with semiannual interest payments, we have to adjust the bond valuation model by multiplying n, the number of years to maturity, by two, and dividing k, the annual interest rate, by two.

   Related Questions in Finance Basics

  • Q : Define Planning Estimate Line Planning

    Planning Estimate Line: The separate planning estimate adjustment or entry for a specific expenditure or type.

  • Q : What is Working Capital and Revolving

    Working Capital and Revolving Fund: For legal base accounting purposes, fund categorization for funds employed to account for the transactions of self-supporting enterprises which render goods or services for a direct charge to the user that is genera

  • Q : Define Reimbursements Reimbursements :

    Reimbursements: The amount received as a payment for the cost of services executed, or of other expenditures made for, or on behalf of, other entity (example, one department reimbursing the other for administrative work executed on its behalf). Reimbu

  • Q : Compare diversifiable and non

    Compare diversifiable and non diversifiable risk. Which do you think is more significant to financial managers within a business firms?Diversifiable risk can be dealt along with by, of course, diversifying. Generally non diversifiable risk is co

  • Q : State Section 30.00 Section 30.00 : It

    Section 30.00: It is a Control Section of Budget Act which amends Government Code Section 13340 to tha sunset continuous appropriations.

  • Q : What is Final Budget Final Budget :

    Final Budget: Usually refers to the Governor’s Budget as amended by actions taken on the Budget Bill (example, legislative changes, and Governor’s vetoes). Note

  • Q : Surpluses drive prices up- shortages

    Normal 0 false false

  • Q : Explain primary assumption behind

    Explain primary assumption behind the experience approach to forecasting?The experience approach to forecasting is depending on the supposition that things will happen a certain way in the future since they happened that way in the past. For exa

  • Q : Define Reversion Reversion : The return

    Reversion: The return of the unused part of an appropriation to the fund from which the appropriation was made, usually two years (that is, four years for federal funds) after the last day of an appropriation’s accessibility period. The Budget A

  • Q : Use of obtainable resources Normal 0

    Normal 0 false false