If your bank quoted a 2% interest rate on your account, which is compounded semiannually, which of the following implications is correct? Your effective annual interest rate on this account is below 2% The monthiy intersst on your account is 0.17% Your effective annual interest rate on this account is 2% The semi-annual interest on your account is 1% If a bond's Yield to Maturity rate is higher than its coupon rate, what would you expect the bond price to be? The bond price is uncertain because it is ultimately driven by market forces. The bond price will be priced the same as its par value because bond price is not related to its coupon rate nor its VTM. The bond will sell at a discount. The bond will sell at a premium. When bond rating companies rate a bond, which are qualities they evaluate? 1. Profitability of the bond issuer II. Management team of the bond issuer III. Default likelihood of the bond issuer IV. Protection offered to bond investors in the event of default V. Predicted return/yield of the bond I and N II and III 1. 111 and V III and IV I and V