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Bond prices and returns vary over time due to changes in a companys risk situation and in response to market factors such as inflation. How
Bond prices and returns vary over time due to changes in a companys risk situation and in response to market factors such as inflation. How would changes in inflation affect the price and the return required on the A bonds? If SDIs risk as perceived by investors increases, what would happen to the price and the required return on these bonds? What effect would such changes have on SDIs capital budgeting decisions?
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