Question: . An investment bank agrees to underwrite a $ 5 0 0 million, 1 0 - year, 8 percent semiannual bondissue for KDO Corporation on

.

An investment bank agrees to underwrite a $

500

million,

10 -

year,

8

percent semiannual bondissue for KDO Corporation on a firm commitment basis. The investment bank pays KDO onThursday and plans to begin a public sale on Friday. What type of interest rate movementdoes the investment bank fear while holding these securities

?

If interest rates rise

0.05

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