Financial Accounting  >  EXAM  >  WGU C214 Finance (Ch 1-15) Questions and Answers Already Passed (All)

WGU C214 Finance (Ch 1-15) Questions and Answers Already Passed

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Duration ✔✔Compares the impact of interest rate changes on a bond. How many percentage points the price of a bond will go up/down if interest rates go down/up. Multiply decimal interest x percen ... tage. Inverse Price Relationship ✔✔When interest rates drop, bond rates go up. When interest rates rise, bond rates go down. Sensitivity ✔✔How sensitive a bond is to fluctuating interest rates (calculated with duration) Debenture ✔✔Bond that has no collateral Par Value ✔✔Face value of a bond (usually 1k) Coupon Rate ✔✔Interest rate of the bond, payable in installments. Cannot be changed for the life of the bond. Yield to Maturity ✔✔rate of return on a bond Affirmative covenants ✔✔things firm promises to do negative covenants ✔✔things firm promises to not do [Show More]

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