QUESTION 43 Which of the following statements is CORRECT? O a. All else equal, secured debt is more risky than unsecured debt ob. The expected return on a corporate bond must be greater than its promised return if the probability of default is greater than zero oc. All else equal, senior debt has more default rink than subordinated debt. od. A company's bond rating is affected by its financial ratios but not by provisions in its indenture Under Chapter 7 of the Bankruptcy Act, the assets of a firm that declares bankruptcy must be liquidated, and the sale proceeds must be used e. to pay off claims against it according to the priority of the claims as spelled out in the Act, QUESTION 44 Which of the following statements is CORRECT? a If a coupon bond is selling at par, its current yield equals its yield to maturity If a coupon bond is telling at a discount, its price will continue to decline until it reaches its par value at maturity If interest rates increase the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year pero coupou band d. If a bond's yield to maturity exceeds its annual coupon, then the bond will trade at a premium If a coupon bond is selling at a premium, its current yield equals its yield to maturity