Question $1(1$ point$)$

Bonds that have investment$-$grade ratings from sources such as S&P tend to have

higher interest $($coupon$)$ rates due to higher default risk.

True

False

Question $2(1$ point$)$

Because not$-$for$-$profit organizations are unable to issues shares of common stock to

raise equity capital, they must rely on debt financing for $100\%$ of their capital

investment needs.

True

False

Question $3(1$ point$)$

Long term debt sources of capital are considered higher risk than equity sources of

capital from the perspective of a risk$-$averse investor due to the potential for

investment losses $/$ non$-$payment associated with debt capital.

True

False