A three-year coupon bond has a face value of $1,000, a coupon rate of 7% and a yield to maturity of 10%. The price of the bond must be _____ $1,000.

Select one:

a.greater than

b.less than

c.equal to

d.cannot be determined

Government budget deficits affect the equilibrium yield on bonds due to its impact on

Select one:

a.the demand for bonds.

b.the supply of bonds.

c.the supply and demand for bonds.

d.Inflation has no effect on bond yields.

Corporations issue more bonds if

Select one:

a.their stocks are publicly traded.

b.the government runs a deficit.

c.they perceive opportunities for profitable expansion.

d.all of the above.

Which of the following factors could explain difference in yields on bonds with the same time to maturity?

Select one:

a.default risk

b.tax considerations

c.liquidity

d.all of the above