Question: Question 42 Conjectural Technologies and Impossible Industries have the same level of default risk. However, Conjectural Technologies is a small firm with only a small

Question 42

Conjectural Technologies and Impossible Industries have the same level of default risk. However, Conjectural Technologies is a small firm with only a small number of bonds issued and in circulation and minimal demand exists for its bonds. Impossible Industries has a large number of bonds in circulation that are widely traded and very high levels of demand for its bonds. Which bond will have a higher yield?

A)		Conjectural Technologies
B)		Impossible Industries
C)		The yields will be equal
D)		Venture Industries

Question 43

Which of the following is true?

	A)	Yield curves typically slope upward
	B)	The interest rates on bonds of differing maturities tend to move together
	C)	The interest rates on bonds of differing risks tend to move together
	D)	All of the above

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