A bond issued by a company with a low credit rating is most likely to have:

Yields which are high

Stable earnings generation and cash flows

Be considered for low yielding portfolios

Which of the following statements related to bond markets is most accurate?

A. newly issued corporate bonds are issued in secondary bond markets.

B. secondary bond markets are where bonds are traded between investors.

C. the major participants in secondary bond markets are retail investors and day traders.

Which of the following best describes a bond’s credit risk?

Default probability inherent in fixed-rate instruments

Expected loss in the event of failure or bankruptcy of a debt issuer

The risk of not getting full interest and principal payments

Which of the following statements about duration is correct?

A. a bond's effective duration is a measure of yield duration

B. a bond's modified duration is a measure of curve duration

C. a bond's modified duration cannot be larger than its Macaulay duration

An investor buys a 6% annual payment bond with 3 years to maturity. The bond has a yield-to-maturity of 8% and is currently priced at $ 94.85 per 100 of par. The bond's Macaulay duration is closest to:

A. 2.62

B. 2.78

C. 2.83