• Interpret the following statements made by Wall Street analysts and portfolio managers.

  1. The values of some stocks are dependent on the bond market. When investors are not interested in junk bonds, the values of stocks ripe for leveraged buyouts decline.

  2. The recent practice in which firms use debt to repurchase some of their stock is a good strategy as long as the firms can withstand the stagnant economy.

  3. Although yields among bonds are related, todays rumors of a tax cut caused an increase in the yield on municipal bonds, while the yield on corporate bonds declined.