Suppose Bond A is a 10 year bond with low default risk, and Bond B is a 10 year bond with high default risk Then, compared to Bond A, Bond B will have a a Higher yield and a higher price b Higher yield and a lower price c lower yield and a higher price d loweryieldandalowerprice Bond prices and the interest rate are a unrelated b positively related c negatively related d eitherpositivelyrelatedornegativelyrelated,dependingonwhetherthemarketparticipantisabondbuyerorseller Which of the following statements is true a If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is below face value b If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is above face value c If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is equal to face value d Iftheyieldtomaturityonacouponbondexceedsthecouponrate,thenthepriceofthebondmaybebelow,above,orequaltofacevalue Other things equal, a bank with a greater amount of equity capital a Has a lower risk of becoming insolvent b Has a higher rate of return on equity to owners c Has a greater degree of liquidity d Issubjecttogreaterregulatoryrestrictions When a bank suffers a deposit outflow and experiences a reserve deficiency, the bank will most likely try which of the following first to correct that deficiency a Call in some loans b Lend to another bank via the federal funds market c Sell some of its securities d Transfer money from some of its depositors accounts

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Question: Suppose Bond A is a 10-year bond with low default risk, and Bond B is a 10-year bond with high default risk. Then, compared to

Suppose Bond A is a 10-year bond with low default risk, and Bond B is a 10-year bond with high default risk. Then, compared to Bond A, Bond B will have a

a.Higher yield and a higher price
b.Higher yield and a lower price
c.lower yield and a higher price
d.loweryieldandalowerprice

Bond prices and the interest rate are

a.unrelated
b.positively related
c.negatively related
d.eitherpositivelyrelatedornegativelyrelated,dependingonwhetherthemarketparticipantisabondbuyerorseller

Which of the following statements is true?

a.If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is below face value.
b.If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is above face value
c.If the yield to maturity on a coupon bond exceeds the coupon rate, then the price of the bond is equal to face value
d.Iftheyieldtomaturityonacouponbondexceedsthecouponrate,thenthepriceofthebondmaybebelow,above,orequaltofacevalue

Other things equal, a bank with a greater amount of equity capital

a.Has a lower risk of becoming insolvent
b.Has a higher rate of return on equity to owners
c.Has a greater degree of liquidity
d.Issubjecttogreaterregulatoryrestrictions

When a bank suffers a deposit outflow and experiences a reserve deficiency, the bank will most likely try which of the following first to correct that deficiency

a.Call in some loans
b.Lend to another bank via the federal funds market
c.Sell some of its securities
d.Transfer money from some of its depositors accounts

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