Question 8 1 pts Check all that are true with respect to the yield to maturity (YTM) and the expected return for a bond. The expected return is based on the contractly obligated payments whereas the YTM is based on what the investors expect to receive The YTM is based on the promised payments whereas the expected return is based on the expected cash flows Higher YTMs always mean higher expected returns In the presence of non-zero default risk, the YTM will be higher than the expected return YTM is just another name for the expected return Question 9 1 pts Consider a bond with uncertain payoffs (non-zero default risk). It is a zero coupon bond (assume annual compounding), a $1,000 face value, and one year to maturity. There is a 80% chance the bond will repay in in full and a 20% change that the bond will default, in which case the investor expects to receive $900. The discount rate is 5%, compounded annually. What is the value of this bond and what is it's YTM? $1,100; 4.0% $1,000; 5.0% $933.33; 7.1% $980.00; 2.0% Question 10 1 pts Select all that are true with respect the similarities or differences between debt and equity. Debt represents an ownership interest in the firm, equity does not. Equity represents an ownership interest in the firm, debt does not. Generally speaking, dividends are tax deductible, interest is not. (US tax laws) Generally speaking, interest is tax deductible, dividends are not. (US tax laws) Debtholders have priority over equity holders in receiving "payments