Please Answer each bullet in order -- True or False

. A zero-coupon bond is a bond that pays no interest and is offered at par. Answer: [ Select ] . The cost of debt of a firm can be computed as a risk-free rate (YTM or spot rate) plus a spread capturing the corporation implied risks. Answer: [ Select ] . Spot rates implied by a yield curve could be very useful since they can be used to discount a project cash flows without restrictive assumptions about reinvestment rates. Answer: [ Select ] . Government yield curves capture agents' expectations about future macroeconomic outcomes. Answer: [ Select ] . Economic growth (say GDP growth rate) tend to anticipate an increase in the slope of the government yield curve . Answer: [ Select ] . When a firm enters an insolvency state, bondholders get paid with a higher probability than shareholders do. Answer: [ Select ] . While a bond issuer will prefer high interest rates by the time the bond is issued, potential bondholders will prefer low interest rates. Answer: [ Select ] . A callable bond will always have a lower price relative to an otherwise identical non- callable bond. Answer: [ Select ] . A bond that is convertible has a chance of being converted into equity shares of the issuer before maturity. Thus, an outstanding convertible bond should have a smaller YTM than an otherwise identical non-convertible bond. Answer: [ Select ]