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Please answer all 4 questions Bond A has a BB rating, while Bond B has a BBB rating. Both are corporate bonds in the same
Please answer all 4 questions
Bond A has a BB rating, while Bond B has a BBB rating. Both are corporate bonds in the same industry. Which bond has the greater default risk? Bond A Bond B Both bonds have the same default risk Question 16 2.5 pts Suppose a $100 bond has a coupon rate of 8.5%. The bond pays annually and matures on 1/1/2024. On 1/1/2020, the discount rate was 8.5%, and on 1/1/2021, the discount rate was 8.5%. Will the bond have a higher price on 1/1/2020 or 1/1/2021? 1/1/2020 1/1/2021 The price of the bond is the same on both dates Question 17 2.5 pts Bond A has a coupon rate of 10%, pays annually, and matures in two years. Bond B has a coupon rate of 10%, pays semi-annually, and matures in two years. Both bonds have a par value of $100, and a yield to maturity of 10%. Which bond will have the higher price today? Bond A Bond B Both bonds will have the same price today Question 18 2.5 pts Which of the following is not a limitation of the valuation models covered in this classStep by Step Solution
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