Question: Please show how to solve in simplest way with work shown. [ multi part question ] If really needed use excel. Two bonds are identical

Please show how to solve in simplest way with work shown. [ multi part question ] If really needed use excel.

Two bonds are identical except for their maturity. The bonds have a coupon rate that is Less than their yield-to-maturity. Which of the following is true when comparing the two bonds? a.) longer maturity bond has a smaller discounted ( priced below par, but closer to par b.) longer maturity bond has a greater discount (priced farther below par) c.) longer maturity bond has greater premium (priced farther above par) d.) longer maturity bond has a smaller premium (priced above par, but closer to par)

If market interest rates (YTM) decline then _____. a.) long-term bonds will decline in value more than short-term bonds b.) short-term bonds will rise in value more than long-term bonds c.) short-term bonds will decline in value more than long-term bonds d.) long-term bonds will rise in value more than short-term bonds

Risk that can be eliminated through proper diversification is called a.) non-diversifiable risk b.) systematic risk c.)market risk d.) firm-specific risk

You are considering investing in Ford Motor Company. Which of the following are examples of diversifiable risk? I. risk resulting from uncertainty regarding a possible worker strike against Ford. II. risk resulting from the possibility of a stock market crash III. risk resulting from increasing interest rates IV. risk resulting from an expensive recall of a ford vehicle a.) I only b.) I and IV c.) II and III d.) I, II , III and IV

This is the component of Total Risk that is attributable to overall economic factors. a.) market risk b.) firm-specific risk c.) diversifiable risk d.) overall risk

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