Author Question: A junk bond is a bond with a A) low yield to maturity. B) value of zero. C) low face value, but ... (Read 145 times)

naturalchemist · **on:** Jun 30, 2018

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