Bonds with relatively high risk of default are often called A Brady bonds B junk bonds C zero coupon bonds D lazy bonds Holding everything else the same, if a corporation's earnings rise, then the default risk on its bonds will and the expected return on those bonds will A Increase decrease B Decrease decrease C Increase increase D Decrease increase Of the securities below, which one has the lowest priority of legal claim on a firms assets in bankruptcy A Secured Debt B Sub Debt C Preferred StockD Senior Debt In general, the ex ante risk return tradeoff (with return on the x axis and risk on the y axis) slopes downward is flat is impossible to determine slopes upward Which of the following long term bonds usually trades at the highest market interest rate 10 year U S Treasury bonds 10 year Corporate Aaa bonds 10 year Corporate Baa bonds 10 year Exempt Municipal bonds 57 The risk structure of interest rates is A the structure of how interest rates move over time B the relationship among interest rates of different bonds, in terms such as credit, but with the same maturity C the relationship among the terms to maturity of different bonds D the relationship among interest rates on bonds with different maturities bonds are the most liquid of the following long term bonds A Callable Agency B Municipal C Corporate Aaa D U S Treasury Interest Rate Risk is A the potential impact of economic stress on principal received B the potential impact of rate changes on market values C The potential impact of a flight to quality on principal received D The potential impact of call options on market values The term would be similar to saying the markets are experiencing a flight to quality A Risk On B Risk Off C Riskless D Riskiness Bonds categorized between BBB and AAA are often called A Junk Bonds B High Class Bonds C Speculative Bonds D Investment Grade Bonds E None of the above Which of the following bond issuers are not currently rated AAA A Johnson Johnson B Apple C Microsoft D All of the above are AAA rated 64 Because BB rated bonds have default risk than AA rated bonds, a BB rated bonds should have a price than a AA rated bond with similar coupon and maturity structures A Higher Lower B Higher Higher C Lower Lower D Lower Higher The duration of a zero coupon bond is always years to maturity A Greater than B Less than C The same as

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Bonds with relatively high risk of default are often called A. Brady bonds. B. junk bonds. C. zero coupon bonds. D. lazy bonds. Holding everything

Bonds with relatively high risk of default are often called A. Brady bonds.

B. junk bonds. C. zero coupon bonds. D. lazy bonds.
Holding everything else the same, if a corporation's earnings rise, then the default risk on its bonds will ________ and the expected return on those bonds will _______. A. Increase | decrease B. Decrease | decrease

C. Increase | increase D. Decrease | increase
Of the securities below, which one has the lowest priority of legal claim on a firms assets in bankruptcy? A. Secured Debt B. Sub Debt

C. Preferred StockD. Senior Debt
In general, the ex-ante risk-return tradeoff (with return on the x-axis and risk on the y- axis)
1. slopes downward.
2. is flat.
3. is impossible to determine.
4. slopes upward.
Which of the following long-term bonds usually trades at the highest market interest rate?
1. 10 year U.S. Treasury bonds
2. 10 year Corporate Aaa bonds
3. 10 year Corporate Baa bonds
4. 10 year Exempt Municipal bonds

57. The risk structure of interest rates is A. the structure of how interest rates move over time. B. the relationship among interest rates of different bonds, in terms such as credit,

but with the same maturity. C. the relationship among the terms to maturity of different bonds. D. the relationship among interest rates on bonds with different maturities.
________ bonds are the most liquid of the following long-term bonds. A. Callable Agency B. Municipal C. Corporate Aaa

D. U.S. Treasury
Interest Rate Risk is A. the potential impact of economic stress on principal received. B. the potential impact of rate changes on market values. C. The potential impact of a flight to quality on principal received. D. The potential impact of call options on market values.
The term ________________ would be similar to saying the markets are experiencing a flight to quality.

A. Risk-On B. Risk-Off C. Riskless D. Riskiness
Bonds categorized between BBB and AAA are often called A. Junk Bonds.

B. High Class Bonds. C. Speculative Bonds. D. Investment Grade Bonds. E. None of the above.
Which of the following bond issuers are not currently rated AAA? A. Johnson & Johnson B. Apple C. Microsoft

D. All of the above are AAA rated

64. Because BB rated bonds have _______________ default risk than AA rated bonds, a BB rated bonds should have a _________ price than a AA rated bond with similar coupon and maturity structures. A. Higher | Lower

B. Higher | Higher C. Lower | Lower D. Lower | Higher
The duration of a zero coupon bond is always __________ years to maturity. A. Greater than

B. Less than C. The same as