How would you describe the behavior of market interest rates and bond returns over the last 30 years? Do swings in market interest rates have any bearing on bond returns? Explain.
Answer to relevant QuestionsIdentify and briefly describe the 5 types of risk to which bonds are exposed. What is the most important source of risk for bonds in general? Explain. What are bond ratings, and how can they affect investor returns? What are split ratings? Describe LYONs, and note how they differ from conventional convertible securities. Are there any similarities between LYONs and conventional convertibles? Explain. You are considering investing $800 in Higgs B. Technology Inc. You can buy common stock at $25 per share; this stock pays no dividends. You can also buy a convertible bond ($1,000 par value) that is currently trading at $790 ...Maria Lopez is a wealthy investor who’s looking for a tax shelter. Maria is in the maximum (35%) federal tax bracket and lives in a state with a very high state income tax. (She pays the maximum of 11½% in state income ...
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