What is the main reason for the yield differences between treasury bond yield and corporate bond yield? a. Credit risk b. Systemic Risk c. Liquidity risk d. Interest rate risk

Q: Bond ratings primarily reflect which of the following? Reinvestment risk, Default risk , Interest…

A: Bond ratings are an important aspect of the bond. It shows the credibility level of the bond issuer.

Q: Which of the following is the worst measure of the cost of debt? Estimating Interest Rate based on…

A: The cost of debt is the effective return that a company pays for its debt to its debtholders. It is…

Q: Among the factors considered in the quantitative models of default risk: a. Business cycle b.…

A: Business cycle is defined as an economic cycle that is linked with fluctuation of the GDP in its…

Q: which of the below has a negative correlation with the return on bonds ? a. Taxability b. Default…

A: Bonds is fixed income instrument that represent that loan provide by investor to borrower. Following…

Q: Which of the following is NOT a defining quality of a standard bond cash flow? a) Coupon b)…

A: Bond is a kind of debt instrument generally issued by corporates, sovereign government & state…

Q: Which is the relationship between the price and the implicit rate of return of a bond?

A: When a company issues a bond, it asks the investor for a loan, i.e. you're lending the bond issuer…

Q: What impact do bond ratings have on the cost of debt to the issuing firm?

A: Bond Ratings: It is the ratings that portrayals of the reliability of corporate or government bonds.…

Q: Define bond yield to maturity. Why is it important?

A: YTM or Yield To Maturity is internal rate of return which is genrated by a bond that equates present…

Q: Is Treasury Bond Yield, the risk free rate?   Yes or No. Explain.

A: Introduction: Risk free rate is nothing but an investment’s return rate with no chance of loss. The…

Q: What are potential problems or limitations of using methods, to estimate the cost of debt, that rely…

A: Bond Ratings are the metrices used to determine the bond's quality and riskiness. It is the rating…

Q: What ratios are likely to be of greatest interest to the banker or trade creditor? To the…

A: The objective of the question is to identify the financial ratios that are of greatest interest to a…

Q: Is the risk-free rate the Treasury Bond Yield

A: Introduction: A risk-free rate is the rate of return on an investment with no risk of loss. The…

Q: Which of the following is a characteristic of a money market financial instrument?

A: Money market financial instruments are those instruments which have short maturity period of up to a…

Q: Discuss how market interest rates are affected by borrowers’ need for capital,expected inflation,…

A: The market interest rates are subject to several customer-related variables, including capital…

Q: initial measurement of a bond on its issuance

A: First option is wrong because initial measurement of bonds can be done by market quotation to fix…

Q: Why is the yield of bonds with credit risk higher than that of otherwise identical default-free…

A: The question is based on the concept of calculation of yield to maturity in bond investment , the…

Q: w much is the cost of equity using the capital asset pricing model? b. How much is the cost of…

A: In this we have to determine the cost of equity using capital asset pricing model.

Q: What is a bond spread and how is it related tothe default risk premium? How are bond ratingsrelated…

A: Bond spread: It is the difference between the yields of two bonds.

Q: f the curvature in the relationship between bond prices and bond yields.

A: Macaulay duration of bond is weighted average no. of times fixed cash flows associated with bond…

Q: What are the potential problems or limitations of using methods, to estimate the cost of debt, that…

A: The cost of debt is the rate that is paid by a corporation on its debt. The debt may include bonds,…

Q: which of the following risks is most closely associated with off balance sheet? trading risk

A: Off balance sheet practice means when some liabilities and assets are not part of company's balance…

Q: Which of the following fixed income securities has the highest level of risk? Which one has the…

A: Fixed-income securities are financial instruments that promise a steady stream of income to…

Q: What is the difference between yield to maturity on outstanding debt and coupon rate? Which is a…

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