28. 10-year Global Government Bonds. YTM (%) COUNTRY COUPON (%) 4.663 U.S 3.875 Germany 2.600 2.722 U.K. 4.250 4.388 Japan 0.800 0.916 Australia 3.000 4.753 China 2.670 2.693 New Zealand 3.500 5.240 France 3.500 3.313 Italy 4.350 4.569 Spain 3.550 3.772 Source: wsj.com, 11/02/23 Which of the bonds above will sell at a premium? a. Only Japan bonds b. All except Japan bonds c. All except France bonds d. Only New Zealand bonds ( e ,) Only France bonds 29. Which of the following statements is INCORRECT? a. The annual return of a bond is equal to its coupon yield (CY) plus the capital gains yield (CGY). b. If a bond sells at a premium, then its coupon rate and current yield (CY) will be higher than the Yield to Maturity (YTM). If a bond sells at par, then the current yield (CY) of the bond will be the same as the Yield to Maturity (YTM). d. If market interest rates stay the same, the prices of all bonds will stay the same until the bond reaches maturity. e. One thing that is true for both bonds and stocks is the capital gains yield (CGY) will be negative if the price at the end of the year (P1) is lower than the price at the beginning of the year (Po). Na 30. Which of the following situations are likely to INCREASE a bond's yield to maturity? 1. Prices on bonds increase lemonnog g 2. The company takes on riskier projects to osuit pin IndW couand I lanceref d 3. The bond becomes subordinated to another bond Sanoiziosh Iniorient Igo aloota lis. 4. Market interest rates increase so oungioilili mist sch al jadW :anoitq O snore .a 2sa. None of the above volquit asowled asonions flib hism ord ers ladW tamong0 Joie b b. Situations 2 and 4 SerinU loora C. All of the above its lo slamsxe ono ai tariW hoivadol Inindian bus lastdyn d. Situations 1, 3 and 4 Soivsded e. Situations 2, 3 and 4 Steodo elgoog ob wilW roivarfold In