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Author Question: The following are some provisions that are often found in a bond indenture. Which of these ... (Read 45 times)

tspaw0811

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on: Aug 7, 2023

Question 1

Ten-year Treasury bonds yield 7.6%. The inflation premium (IP) is 2.8%, and the maturity risk premium (MRP) on 10-year bonds is 1.4%. What is the real risk-free rate, r*?

◦

3.15%


◦

3.40%


◦

3.65%


◦

3.80%



Question 2

The following are some provisions that are often found in a bond indenture. Which of these provisions would probably NOT reduce the yield to maturity that investors would otherwise require on a newly issued bond?

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The bond is subordinated to certain bank loans.


◦

The bond has a sinking fund.


◦

Real estate is used as security for the bond.


◦

The indenture contains covenants that keep the company’s debt ratio below a given level.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by tspaw0811 on Aug 7, 2023

katrey9207

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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tspaw0811

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Reply 2 on: Aug 7, 2023
Excellent

shailee

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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