In the Income Statement, interest would be considered _____ and would _____ Net Income.

revenue; increase

operating expense; increase

interest expense; decrease

other income; decrease

To calculate the interest payment in dollars a bond will pay the owner each year, you would _____.

		multiply the YTM by the bond price
		divide the YTC by the call price
		divide Rd by coupon
		multiply coupon by par value
		any of the above

Assuming the day after the bond is sold, the yield to maturity inceases from 7% to 9%. What will happen to the price of the bond? Why?

		It will rise; the bond price is a function of (Kd) where Kd = Market Interest Rate.
		It will fall; the bond price is a function of (1/Kd).
		It will not change; the bond price is not a function of (Kd).