Indicate whether each of the following actions will increase or decrease a bond's yield to maturity:

a. A bond's price increases.

b. The company's bonds are downgraded by the rating agencies.

c. A change in the bankruptcy code makes it more difficult for bondholders to receive payments in the event a tirm declares bankruptcy.

d. The economy enters a recession.

e. The bonds become subordinated to another debt issue.
Assume that you have a short investment horizon (that is, less than one year). You are considering two investments: a 1-year Treasury security and a 20-year Treasury security. Which of the two investments would you view as being more risky?AppendixLO1