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A bond investor is analyzing the following annual coupon bonds: Issuing Company Johnson Enterprises Smith Incorporated Irwin Metalworks Annual Coupon Rate 5% 12% 9% Each

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A bond investor is analyzing the following annual coupon bonds: Issuing Company Johnson Enterprises Smith Incorporated Irwin Metalworks Annual Coupon Rate 5% 12% 9% Each bond has 10 years until maturity and has the same risk. Their yield to maturity (YTM) is 9%. Interest rates are assumed to remain constant over the next 10 years. Label the curves on the following graph to indicate the path that each bond's price, or value, is expected to follow BOND VALUE I$) 1200 1100 1000 900 800 700 600 YEARS TO MATURITY Based on the preceding information, which of the following statements are true? Check all that apply The expected capital gains yield for Smith's bonds is greater than 12% The bonds have the same expected total return The expected capital gains yield for Smith's bonds is negative Johnson's bonds have the highest expected total return Irwin's bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to as a

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