QUESTION 29 A change in foreign exchange rates can affect the profitability of financial institutions by a. changing the value of assets b. changing the number of investments C. changing the loan agreements Both b. and All of the above QUESTION 30 If you suspect that a company will go bankrupt next year, would you prefer to hold the firm's bonds or equity? Bonds because they are paid last. Equity because they have claim over the residual income. Bonds because they are paid first. QUESTION 31 A $1,000 par, 496 coupon bond with 7 years to maturity can be purchased for $900. What is the YTM? 5.7796 5.0096 4.3996 4.00 QUESTION 32 A Moody's A rated corporate bond will have a higher risk premium than a Baa rated corporate bond. Yes, because the A rated bond will have a higher default risk than the Baa rated bond. No, because the A rated bond will have a lower default risk than the Baa rated bond. The default risk will be equal for each bond QUESTION 33 You want to purchase a house for $190,000. A bank will make you a loan at 4.5% interest for 30 years with annual payments. About what would be your annual payment? $11,664 $11,472 $10.331 $9.994