Risker investments require? A higher discount rate A lower discount rate It depends Risk has nothing to do with the discount rate Your company is analyzing the attractiveness of an investment in capital equipment. The cash flows generated from this investment are expected further into the future than is usual for this company's investments. How does increasing the time period in a stream of cash flows affect its riskiness? It increases the risk It lowers the risk Time has no impact on risk Not enough information to answer Some debt, like mortgages, is backed by collateral. Would you expect debt backed by collateral to carry higher or lower interest rates or have no impact on the interest rate? Higher Lower No impact You own bonds in a company that produces a highly profitable technology for businesses. Today, a competitor announces a new product that will quickly make your company's main product obsolete. How does this impact the YTM on your bonds and their price? YTM goes down/price goes down. YTM goes down/price goes up. YTM goes up/price goes down. YTM goes up/price goes up. How does the scenario in the prior problem impact the cost of equity? It raises the cost of equity. It lowers the cost of equity. It has no impact on the cost of equity. Not enough information to answer. LOL Industries issues two bonds at the same time. They are exact in every way except one issue is callable and the other is not. Which bond has a higher YTM? The callable bond The non-callable bond They both have the same YTM Not enough information to