Question 2 40 pts Whether the following statements are correct? While a bond issuer will prefer high interest rates by the time the bond is issued, potential bondholders will prefer low interest rates. A bond that is convertible has a chance of being converted into equity shares of the issuer before maturity. Thus, and outstanding convertible bond should have a smaller YTM than an otherwise identical non-convertible bond. Spot rates implied by a yield curve could be very useful since they can be used to discount a project cash flows without restrictive assumptions about reinvestment rates. Government yield curves capture agents' expectations about future macroeconomic outcomes Economic growth (say GDP growth rate) tend to anticipate an increase in the slope of the government yield. When a firm enters an insolvency state bondholders get paid with a higher probability than shareholders do