Because of their cash flow characteristics, __________bonds are sold at an original price that is lower than their face value.

A. low-coupon

B. Treasury

C. high-coupon

D. zero-coupon

__________ are a prime source of yield differentials between government bonds and corporate bonds.

A. Inflation rates

B. Income tax rates

C. Forward rates

D. Default risk premiums

__________ measures the number of years needed to recover the conversion premium with the convertibles higher income.

A. Breakeven time

B. Conversion value

C. Macaulay duration

D. Time to maturity