All bondholders agreed to amend the bond indenture for a financially-troubled corporation to extend the final payment date by 5 years and reduce the coupon by 1%. Does this agreement create a loss for investors? Why or why not? (Explain your answer in 3-4 bullet points)

2. Great news: The economy added 300,000 new jobs. What must you know in order to estimate how the bond or stock market will react to this number? (Explain your answer in 1-2 bullet points)

3. Inflation soured to 7%. Most economists expected 8%. How do you think the bond market reacted to this news? A) Rally (bond prices up/rates down) or B) Selloff (bond prices down / rates up) (Explain your answer in 1-2 bullet points)

Answer rating: 100% (QA)

1 The agreement to extend the final payment date and reduce the coupon does not necessarily create a ... View the full answer