QUESTION 1 Two bonds issued by the same corporation have the same term. One bond has higher coupon rate than the other. Which of the following statement is true? a. the bond with the lower coupons have the higher yield O b. the bond with the higher coupons have the same yield rate as the bond with lower coupon O c. the bond with the lower coupons have the lower yield the bond with the higher coupons have the higher yield Oe. None of these QUESTION 4 Anderson Bank offers a five-year loan. It is repaid with a single payment of principal and interest at time five. Anderson wants to receive an annual rate of 5% compounded continuously to reflect deferred compensation. For this loan, the percentage of borrowers that will default is 0.7%. For the loans where there are defaults, Anderson Bank will be able to recover 30% of the amount owed after five years. Let be the credit spread calculated as an annual rate compounded continuously that Anderson Bank needs to charge. Calculate 10008 O a. 0.68 b.0.98 c. 1.08 d. 0.88 Oe. 0.78