Suppose interest rates have been at historically low levels the past two years. A reasonable strategy for bond investors during this time period would be to Select one: a invest in long-term bonds to reduce interest rate risk b. Invest in long-term bonds to lock in a bond position for when interest rates increase in the future c. buy only junk bonds which have higher interest rates d. invest in short term bonds to reduce interest rate risk Preferred stock valuation usually treats the preferred stock as a Select one: o a. capital asset b. perpetuity c. common stock d. long-term bond Using the constant growth dividend valuation model and assuming dividends will growth a constant rate forever, the increase in the value of the stock each year should be equal to the Select one: a. dividend yield O b. required return on the stock, kes c. growth rate in dividends, 9 0 d. dividend yield plus the capital gains yield Shafer Corporation issued callable bonds. The bonds are most likely to be called if Select one: a. interest rates increase b. Shafer Corporation needs additional financing c. Shafer Corporation's stock price increases dramatically O d. interest rates decrease John and Karen are both considering buying a corporate bond with a coupon rate of 8%, a face value of $1,000, and a maturity date of January 1, 2025. Which of the following statements is most correct? Select one: a. Because both John and Karen will receive the same cash flows if they each buy a bond, they both must assign the same value to the bond. b. If John decides to buy the bond, then Karen will also decide to buy the bond, if markets are efficient. C. John may determine a different value for a bond than Karen because each investor may have a different level of risk aversion, and hence a different required return. d. John and Karen will only buy the bonds if the bonds are rated BBB or above