Which of the following factors would tend to increase the risk premium betweencorporate bonds and Government bonds? Select all that apply.0Small market for corporate bondsEconomic recessionLow average debt-to-equity ratio of firmsTax exemption for interest income from Government bonds

Several factors can contribute to an increase in the risk premium between corporate bonds and…

Which of the following factors would tend to increase the risk premium between corporate bonds and Government bonds? Select all that apply. 000 Small market for corporate bonds Economic recession Low average debt-to-equity ratio of firms Tax exemption for interest income from Government bonds

Which of the following factors would tend to increase the risk premium between corporate bonds and Government bonds? Select all that apply. 000 Small market for corporate bonds Economic recession Low average debt-to-equity ratio of firms Tax exemption for interest income from Government bonds

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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Which of the following factors would tend to increase the risk premium between
corporate bonds and Government bonds? Select all that apply.
0
Small market for corporate bonds
Economic recession
Low average debt-to-equity ratio of firms
Tax exemption for interest income from Government bonds

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Which of the following is true about “zeroes” (i.e. zero-coupon bonds)? (Group of answer choices) Zeroes sell at a premium compared to other bonds Zeroes pay more interest than a Treasury bill Zeroes are only issued by US corporations Zeroes only receive payment from price appreciation Zeroes have a shorter maturity than other bonds
23
5.1 Please provide step by step explaination as I keep getting this question wrong
Which of the following is a disadvantage to a corporation issuing bonds? Group of answer choices A)The required interest payment must be met each period. B)The liquid nature of the bonds makes them attractive to investors who may not want to hold them to maturity. c)The large principal payment due at maturity. d)Both the first and third answers above are both disadvantages. e)The first, second and third answers above are all disadvantages.
when are corporations likely they called the Bonds? A. When the market interest rate is higher than the contract rate, b. When the contract rate is higher than the market rate. C. When their bonds at selling at par with market d. When standard and poor are bullish about treasury bills E. None of the above
Which of the following statement is true? Interest rates on Municipal bonds are on average Question 24 options: lower than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as liquid as the U.S. government bonds . higher than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as risky as the U.S. government bonds . lower than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as risky as the U.S. government bonds . lower than those of the U.S. government bonds with the same terms to maturity because many local business prefers municipal bonds. higher than those of the U.S. government bonds with the same terms to maturity because municipal bonds are not as liquid as the U.S. government bonds .
The Federal Reserve decided to buy bonds in order to bring the economy back to full employment. This must mean that the Federal Reserve believes that the full employment level of output is a not enough information b below 1 million c exactly 1 million d above 1 million
Zero coupon bonds: O a. create annual taxable income to individual bondholders. O b. create a tax deduction for the issuer only at maturity. O care issued only by the U.S. Treasury. O d. are issued at a premium. O e. are valued using simple interest.
A 151.
1. How would you define corporatebonds? Explain in your own wordswhat Bonds issued at Par, at aDiscount, and at a Premium are.2. How would you explain thedifference between bank loans andissuing corporate bonds? In youropinion, which of the fundingmethods is more attractive to acompany?
Corporate bonds are riskier than US Treasury, so they pay default risk premium over what Treasury pays to stay competitive in the market. True False
1. Why do short-term debt securities issued by private companies generally offer higher yields than treasury bills issued by central governments?

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