A bond issued by a company with a low credit rating is most likely to have: Yields
Question:
A bond issued by a company with a low credit rating is most likely to have:
Yields which are high
Stable earnings generation and cash flows
Be considered for low yielding portfolios
Which of the following statements related to bond markets is most accurate?
A. newly issued corporate bonds are issued in secondary bond markets.
B. secondary bond markets are where bonds are traded between investors.
C. the major participants in secondary bond markets are retail investors and day traders.
Which of the following best describes a bond’s credit risk?
Default probability inherent in fixed-rate instruments
Expected loss in the event of failure or bankruptcy of a debt issuer
The risk of not getting full interest and principal payments
Which of the following statements about duration is correct?
A. a bond's effective duration is a measure of yield duration
B. a bond's modified duration is a measure of curve duration
C. a bond's modified duration cannot be larger than its Macaulay duration
An investor buys a 6% annual payment bond with 3 years to maturity. The bond has a yield-to-maturity of 8% and is currently priced at $ 94.85 per 100 of par. The bond's Macaulay duration is closest to:
A. 2.62
B. 2.78
C. 2.83
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson