Question 16 of 25 Your firm is issuing a five-year semi-annual coupon bond that has been...

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Question 16 of 25 Your firm is issuing a five-year semi-annual coupon bond that has been rated BBB by S&P. Currently, the average BBB bond has a credit spread of 200 basis points. The yield to maturity of a five-year Treasury semi-annual coupon bonds is currently 1.8%. If you price these bonds at par, which of the following coupon rates would you have to set? A. 1.6% B. 3.8% C. 1.8% 1 Points OD. 2% Reset Selection Question 17 of 25 Which of the following statements are true? i. A fall in bond prices causes interest rates to increase. ii. You would consider a fixed overhead cost when making a capital budgeting decision. iii. An inverted yield curve is typically considered to be an indicator of a future recession. iv. One explanation of an upward sloping yield curve is that longer maturity bonds are considered more risky to investors. OA. I, III B. III, IV 1 Points OC. I, III, IV OD. II, III, IV Reset Selection Question 16 of 25 Your firm is issuing a five-year semi-annual coupon bond that has been rated BBB by S&P. Currently, the average BBB bond has a credit spread of 200 basis points. The yield to maturity of a five-year Treasury semi-annual coupon bonds is currently 1.8%. If you price these bonds at par, which of the following coupon rates would you have to set? A. 1.6% B. 3.8% C. 1.8% 1 Points OD. 2% Reset Selection Question 17 of 25 Which of the following statements are true? i. A fall in bond prices causes interest rates to increase. ii. You would consider a fixed overhead cost when making a capital budgeting decision. iii. An inverted yield curve is typically considered to be an indicator of a future recession. iv. One explanation of an upward sloping yield curve is that longer maturity bonds are considered more risky to investors. OA. I, III B. III, IV 1 Points OC. I, III, IV OD. II, III, IV Reset Selection

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Q16 B 38 explanation yield 18 2spread 38 Q17 B i... View the full answer