Question 2:

All other things being equal, the interest earned over the life of an investment on an annuity due will be lower than the interest earned on an annuity.

1. True
2. False

Investment grade bonds have a ____ risk of default and rated ____ or above, while junk bonds have _____ risk of default and are related _____ or below.

1. Low, BBB, high, BB
2. High, BBB, low, BB
3. Low, B, low, CCC
4. Low, A, high, BBB

Question 28:

Linville Corporation issued 12-year, par $1,000 bonds ten-years ago at a coupon rate of 7 percent. If these bonds currently sell for 90 percent of par value, what is its yield to maturity (YTM)?

1. 8.35%
2. 6.41%
3. 11.56%
4. 12.99%