Corporate bonds have higher yields than comparable Treasury bonds because of the higher____ O taxability premium O inflation premium  O interest rate risk O default risk

Q: A junk bond rating is BAA BBB and lower BB none of the above

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: An investor is seeking a bond issue offering call protection. An issue having which features would…

A: Call premium said to the payment made to the investor of bond holders if the security is early…

Q: Zero coupon bonds are disadvantageous to the issuing firm if interest rates fall. Select an answer…

A: Bonds are debt instruments that represent a loan from an investor to a borrower, which is usually a…

Q: while putable bonds are beneficial to the investor when interest rates go down, the downside is that…

A: Bond risk management is the process of identifying, evaluating, and reducing the risks related to…

Q: Because the diversification benefit from adding another asset declines as the total number of assets…

A: Diversification means adding different type of assets in your portfolio so as to bring down the…

Q: Bonds with relatively low risk of default are called O junk bonds. zero coupon bonds.…

A: Bonds are type of debt which will help the company in order to raise the capital for the longer…

Q: Which bond usually will have a higher liquidity premium:one issued by a large company or one issued…

A: The liquidity premium may be a premium asked by speculators when the reasonable market value of any…

Q: Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term…

A:

Q: Identify and explain two traditional theories which seek to explain the term structure of interest…

A: Term structure of interest rate shows the interest rates for different period of time. One year…

Q: The liquidity premium theory of the term structure O indicates that today's long-term interest rate…

A: The liquidity premium theory of the term structure of interest rates proposes that long-term…

Q: 1. State 2 reasons why Net Present Value is a better decision criteria compared to other…

A: Net present value or NPV is an important concept used in capital budgeting. It is considered as a…

Q: A Moving to another question will save this response. uèstion 7 A callable bonds is an advantage to…

A: Callable bonds usually trade at lower prices.

Q: Debentures are expected to have a higher yield than secured bonds because the debentures are more…

A: Debentures are bonds but slightly different than bonds because debentures are not secured like…

Q: Which of the following statements about bonds is NOT true? O The less marketable a bond, the higher…

A: Interest rates and bond prices are closely tied. This is untrue since interest rates and bond prices…

Q: When interest rates rise, bond refunding becomes quite popular. Select one: True O False

A: When interest rates rise, bond refunding becomes more popular among issuers. This is because issuers…

Q: Which is unsecured? Ozero-coupon bond O NONE of the choices are examples of unsecured debt.…

A: Unsecured debt is a type of debt that is not backed by any collateral, such as assets or property.…

Q: Investing in bonds is generally less risky than investing in stocks.  True  False

A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…

Q: Higher interest rates on treasury bonds Identify whether it: (Select one choice per number) (A)…

A: Inflation is defined as a quantitative estimate of the rate at which a currency's buying power is…

Q: When a firm gets riskier what will happen to its bonds Multiple Choice   the stated interest rate…

A: Bonds are the debt obligations of a business on which it requires to pay regular interest to the…

Q: Which of the following describes a bond's credit risk? O The probability that financially sound…

A: The credit risk of a bond refers to the likelihood that the issuer of the bond will default on its…

Q: 5. If an investor is long/the buyer a CDS they are deemed to have the economic interest of being…

A: When an investor buys a Credit Default Swap (CDS), they are essentially purchasing protection…

Q: (please all options information and correct answer) Decreases in the following factors that will…

A: A bond refers to a fixed-income investment instrument issued by governments, municipalities, or…

Q: allable bonds provide benefit to the______ and hence offer_______rate of return than non-callable…

A: Callable bonds are bonds which have options to be called before maturity at any time as per issuer…

Q: Generally speaking, short-term bonds have lower yields than long-term bonds. True False

A: Bonds are financial instruments representing debt obligations issued by various entities, including…

Q: bond issuance costs are incurred

A: First option is wrong because one among the options is correct. Second option is wrong because…

Q: If an investor is concerned about interest risk, which of the following bonds should a registered…

A: Bonds are fixed-income securities that represent loans made by investors to borrowers, typically…

Q: Why are bonds sometimes issued at a discount?

A: The correct answer is: (A) The stated rate of interest is lower than the rate being paid on…

Q: Risks of investing in bonds The higher the risk of a security, the higher its expected return will…

A: A bond is a fixed-income security that gives the investor the right to receive the coupon payments…

Q: If the market rate is higher than the stated rate, the bonds will sell for less than face value and…

A: Solution Concept If the market rate is higher than the stated rate, the bonds will sell for less…

Q: Which of the following statements about bonds are true?   a.   The bond price and yield of the…

A: A bond is a fixed-income investment that simulates a loan from an investor to a borrower (typically…

Q: Q8   Which of the following bonds carry significant risk that the issuer will not make current or…

A: Solution: Bonds are a type of security issued by companies which pay a fixed amount of interest at…

Q: Does a steady low-volatility environment, increase, decrease, or have no effect on the credit spread…

A: answer are as follows.

Q: Which of the following lowers the required interest rate that firms have to pay on their bonds?…

A: Companies tend to pay larger interest rates as the risk is raised to the bond investor since the…

Q: its) Which of the following pieces of information is NOT necessary to compute the present value of a…

A: The equation required to calculate the present value of bond is given belowPresent value of…

Q: While bonds are generally considered safer than stocks, they are not 'risk free!. Describe 3 risks…

A: Bond is referred to as an instrument of an indebtedness of the bond issuer to holders. Most common…

Q: When selling bonds at a premium, the premium received effectively a.does not affect the cost of…

A: Premium means selling of bond at price higher than face value.

Q: Beacuase the conversion feature in a convertible bond is valuable to  bondholders, convertible bond…

A: No, the company cannot lower the cost of borrowing by selling the convertible debt.

Q: Which of the following statements is true about bond theorems? ( a. For a given change in the…

A: The bond theorems attempt to establish a relationship between the bond's price, yields, coupon, and…

Q: Firms generally decide to call their bonds when interest rates   rise drop remain the same there is…

A: When the bond interest rate rises, the firms are at an advantage as they have been able to secure…

Q: If a bond has a credit rating of A, which of the following is not true: A. The bond has more risk…

A: bond has different features

Q: ‘Debt finance is less expensive than equity finance’ Explain

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: When the liquidity of bonds decreases, the demand curve for bonds shifts to the a. right b. left…

A: A bond represents a financial instrument issued by the firm for raising debt capital from investors.

Q: Which of the following statement is false about premium on bonds payable?   It decreases the…

A: Premium on bonds payable is the amount in excess of face value of the bonds payable. In simple, when…

Q: One of the disadvantages of bonds is that they usually offer a fixed interest rate. Once a bond is…

A: The inflation-adjusted interest rate, also known as the real interest rate, plays a crucial role in…

Q: Which of the following supply and demand graphs for bonds issued by Company X represents what…

A: Default risk is the risk when the issuer of the bond is not able to make timely interest or coupon…