A junk bond is a bond with a A) low yield to maturity. B) ...

[naturalchemist]

A junk bond is a bond with a
 
  A) low yield to maturity.
  B) value of zero.
  C) low face value, but high coupon rate.
  D) high default risk.
  E) very low maturity.

Question 2

Based on our understanding of the determinants of the interest rate and bond prices, we know that a reduction in income will cause
 
  A) an increase in bond prices and an increase in the interest rate (i).
  B) a reduction in bond prices and an increase in i.
  C) an increase in bond prices and a reduction in i.
  D) a reduction in bond prices and a reduction in i.
  E) none of the above

[Kedrick2014]

Answer to Question 1

D

Answer to Question 2

C

[naturalchemist]

Gracias!

[bassamabas]

TYSM