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Question 1 Which of the following statements is most correct? a. The expected return on corporate bonds will generally exceed the yield to maturity. b.

Question 1

Which of the following statements is most correct?

a. The expected return on corporate bonds will generally exceed the yield to maturity.

b. If a company increases its debt ratio, this is likely to reduce the default premium on its existing bonds.

c. All else equal, senior debt will generally have a lower yield to maturity that subordinated debt.

d. Answers a and c are correct

e. None of the answers are correct

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