12) Unlike stock, once sold, bonds can only be traded in private transactions between arms' length (3pts) parties. True False 13) Which one of the following would be considered a contingent liability? (3pts) U A company estimates that it will probably have to pay $75,000 to the EPA for a chemical spill. A company owes $35,000 on inventories purchased on credit A company has access to a line of credit with a bank in the amount of $120,000. A company believes that it is reasonably possible it will lose a lawsuit and damages could be $100,000. None of the above 14) In general, how do credit analysts determine the risk-free rate? (3pts) The average corporate yield The yield on U.S. Government borrowings The rate defined by the largest U.S. banks The weighted average corporate yield based on the preceding four quarters None of the above 15) What is the risk premium for a company that has a yield rate of 6.24% when the risk-free rate ipts) 4.88%