Explain the system of bond ratings used by Moody’s and Standard & Poor’s. Why would it make sense to ever buy junk bonds?
Answer to relevant QuestionsExplain the difference between dirty (full) and clean bond prices? What is the significance of the difference in the prices for a bond buyer?What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns.a. Buy a stock for $30 a share, hold it for three years, and ...The price of Garden Designs, Inc. is now $85. The company pays no dividends. Sean Perth expects the price four years from now to be $125 a share. Should Sean buy Garden Designs if he wants a 15 percent rate of return? ...You have decided to sell a 5 percent semiannual coupon bond two months after the last coupon payment. The bond is currently selling for $951.25. Answer the following questions about the bond:a. What is the clean price of the ...What is a 12(b)-1 fund? Can such a fund operate as a no-load fund?
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