A.TRUE / FALSE QUESTIONS

TRUE_1.A conversion feature in a "convertible bond" bond allows bondholders to exchange

each bond for a stated number of shares of common stock.

______2.Any bond rated Aaa through Caa according to Moody's, would be considered an "investment grade" bond.

______3.The market value of a bond will approach its par value as it nears maturity.

______4."Behavioral finance" focuses on psychological factors that affect investor behavior, as well as their impact on investor behavior and stock prices.

______5.Unlike shareholders, creditors (such as bondholders) are owners of the firm.

______6.The tax deductibility of interest expense lowers the cost of debt financing for a corporation.