Question
Which of the following is CORRECT? a. The better the bond rating, the more default risk associated with the bond, the higher is the nominal
Which of the following is CORRECT?
a. | The better the bond rating, the more default risk associated with the bond, the higher is the nominal interest rate, all else equal. | |
b. | Other things held constant, the higher inflation rate is expected in the future, the lower is the nominal interest rate. | |
c. | Maturity risk premiums are generally higher on short-term bonds than on long-term bonds. | |
d. | Other things held constant, the more liquid is a bond, the lower is the nominal interest rate. | |
e. | If a bonds coupon rate exceeds its market interest rate, then the bond will trade at a discount. |
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