37. Junk bonds are high-risk, high-yield debt instruments. They are often used to "lunk honde" finance leveraged buyouts and mergers, and to provide financing to companies of questionable financial strength. a. b. True False 38. If a bank compounds the interest income that you earn on a savings account on a quarterly basis, the nominal rate will exceed the effective annual rate. a. b. True False 39. The cash flows associated with equity investing are typically more difficult to forecast than the coupons earned on bonds, because common stocks have a residual claim against the income and assets of a company, versus the contractual obligation of payments for a bond. a. True False b. 40 The total payment made each period on an amortized loan is constant, and it consists of some interest and some principal repayment. The closer we are to the end of the loan's life, the greater the percentage of the payment that will be a repayment of principal. True False