Radoski Inc. has bonds outstanding with 12 years left to maturity. The bonds have a 7.35% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in interest rates, the bond market price has fallen to $920. For the coming year, what is the expected capital gains yield? 7.99% 3.01% 0.45% 0.74% 0.52% Which of the following is Incorrect? Bond ratings are designed to reflect the probability of a bond issue going into default. Default risk is Influenced by the issuer's financial strength and the terms of the bond contract including whether collateral has been pledged to secure the bond. Debentures are only used by weak companies. Debenture holders are general creditors whose claims are protected by property not otherwise pledged. Which of the following is False? The longer the maturity, the greater the change in value of a bond for a given change in interest rates, rd. Price risk relates to the income the portfolio produces while reinvestment risk relates to the current value of the bond portfolio. An investor's investment horizon determines which type of risk, price risk or reinvestment risk, is more relevant. Duration is the weighted average of the time it takes to receive each of the bond's cash flows