45 to 48 please

Student Name (Please Print) 45) Which of the following statements is CORRECT? A. All else equal, senior debt generally has a lower yield to maturity than subordinated debt. B. An indenture is a band that is less risky than a mortgage bond. C. The expected return on a corporate bond will generally exceed the bond's yield to maturity. D. If a bond's coupon rate exceeds its yield to maturity, then its expected return to investors will also exceed its yield to maturity. E. Under our bankruptcy laws, any firm that is in financial distress will be forced to declare bankruptcy and then be liquidated. 46) A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? A. The bond sells at a price below par. B. The bond has a current yield greater than 8% C. The bond sells at a discount. D. The bond's required rate of return is less than 7.5%. E. If the yield to maturity remains constant, the price of the bond will decline over time. 47) Which of the following statements is CORRECT? A. The yield to maturity for a coupon bond that sells at a premium consists entirely of a positive capital gains yield; it has a zero current interest yield. B. The market value of a bond will always approach its par value as its maturity date approaches. This holds true even if the firm has filed for bankruptcy. C. Rising Inflation makes the actual yield to maturity on a bond greater than a quoted yield to maturity that is based on market prices. D. The yield to maturity on a coupon bond that sells at its par value consists entirely of a current interest yield; it has a zero expected capital gains yield. E. The expected capital gains yield on a bond will always be zero or positive because no investor would purchase a bond with an expected capital loss. 48) Some of the cash flows shown on a time line can be in the form of annuity payments but none can be uneven amounts. A. True B False Page 11 of 12