Question
Bond A and B are identical except that Bond B has a lower bond rating, which means it has greater default risk. Which of the
Bond A and B are identical except that Bond B has a lower bond rating, which means it has greater default risk. Which of the following statements is correct?
Bond A will have a lower value than bond B.
Bond B will have a higher YTM than Bond A
Bond A and Bond B will have the same value because they are identical except for default risk.
None of the above.
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Personal Finance
Authors: Jack R Kapoor, Glencoe McGraw Hill, Les R Dlabay, Robert J Hughes
1st Edition
0078698006, 9780078698002
