Question: I-Lower the bond rating (i.e. A is higher ; C is lower), ____________ a lower the expected return b higher the default risk c lower

I-Lower the bond rating (i.e. A is higher ; C is lower), ____________

a

lower the expected return
b

higher the default risk
c

lower the interest rate
d

higher the ability to pay coupon payments

II- Which quote, asked or bid, would an investor be expected to pay to a dealer if he or she was buying a bond from the dealer?

a

the bid price
b

an average of the two prices
c

the asked price

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