If the demand for a new bond issue increases, it is likely that ...

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If the demand for a new bond issue increases, it is likely that the coupon rate will be adjusted
  upward by the issuing company.
 
  Indicate whether the statement is true or false

Question 2

You have just won the university lottery. If you graduate, you will receive a refund equal to the amount of tuition you paid in your first four years of school.
 
  However, you need money now and a firm that specializes in buying expected future cash flows has offered to discount the lottery winnings at a rate of 8 and pay you cash today in exchange for your future lottery winnings. Since you have studied finance, you insist that they discount the cash flows at 12 instead of 8 because there is some risk as to the certainty of your graduating. If the firm agrees to your demand, then this means they will increase the present value of what they will pay you today.
  Indicate whether the statement is true or false.

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Answer to Question 1

FALSE

Answer to Question 2

Answer: FALSE
Explanation: An increase in the discount rate will decrease the present value of what the firm will pay you today.