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Explain the main premiums usually associated with bonds. How do such premiums affect bond prices? How do credit ratings affect bond prices?

Explain the main premiums usually associated with bonds. How do such premiums affect bond prices? How do credit ratings affect bond prices?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Explain the main premiums usually associated with bonds. How do such premiums affect bond prices? How do credit ratings affect bond prices? If inflation decreases, all else being unchanged, how does that affect bond prices? If inflation decreases, all else being unchanged, how does that affect stock prices? Assume that you are focusing on Income stocks here first and foremost, which have a relatively stable cash flow in the future
Transcribed Image Text:Explain the main premiums usually associated with bonds. How do such premiums affect bond prices? How do credit ratings affect bond prices? If inflation decreases, all else being unchanged, how does that affect bond prices? If inflation decreases, all else being unchanged, how does that affect stock prices? Assume that you are focusing on Income stocks here first and foremost, which have a relatively stable cash flow in the future
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