QUESTION 19 1 points Save Answer Bonds for two companies were just issued: Short Corp.'s bonds will mature in 5 years, and Long Corp's bonds will mature in 15 years. Both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they are equally liquid. Further, assume that the Treasury yield curve is based only on expectations about future inflation, i.e, that the maturity risk premium is zero for T-bonds. Under these conditions, which of the following statements is correct? O a If the yield curve for Treasury securities is upward sloping, Long's bonds must under all conditions have a higher yield than Short's bonds. O b.If the Treasury yield curve is downward sloping, Long's bonds must under all conditions have the lower yield. c.Ifthe yield curve for Treasury securities is flat. Short's bond must under all conditions have the same yield as Long's bonds. Od. If the Treasury yield curve is upward sloping and Short has less default risk than Long, then Short's bonds must under all conditions have the lower yield e. If Long's and Shorts bonds have the same default risk, their yields must under all conditions be equal. QUESTION 20 1 points Save Answer Which of the following statements is CORRECT? a The total return on a bond during a given year consists only of the coupon interest payments received. c.An else opal, a bond that has a coupon rate of 10% will sell at a discount ifthe required return for bonds ofsimilar risk is 8% e For a given firm, its debentures are likely to have a lower yield to maturity than its mortgage bonds b. The price of a discount bond will increase over time, assuming that the bond's yield to maturity remains constant Od Whem large firms are in financial distress, they are almost always liquidated, whereas smaller firms are generally reorganized