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Which of the following non-callable bonds represents a better investment? A company issues the following bonds on June 1, 2002. If both bonds have the
Which of the following non-callable bonds represents a better investment? A company issues the following bonds on June 1, 2002. If both bonds have the same market liquidity and are unsecured (as well as have no embedded put or conversion rights), the required yield-to-maturity on the Series A should be: lower the same higher either higher or lower depending on other factors In a typical variable-rate loan, the extra interest yield owed by a borrowing company above the varying London Interbank Offering Rate (Libor) can be contractually set by the lender via the subtraction of the current spread between Libor and T-bill rates from: the premium yield required for the default risk of the loan the premium yield required for the systematic risk of the loan the premium yield required for the transaction costs of trading the loan the sum of all the above the tax-adjusted premium yield on Libor loan indexes market interest rates increase, but all other variables that affect stock prices (like expected future earnings and dividend growth rates) remain constant, common stock market prices should: increase decrease stay constant change, but in no obvious direction Investing internationally is desirable because investors benefit from the fact that: there is a direct relationship between the value of the U S. dollar and U.S. stock market returns. foreign currencies are more stable than the U.S. dollar. Portfolio diversification increases. foreign stocks pay higher dividends. Which one of the following bonds has the longest duration (and thus the highest interest rate risk and the lowest re- investment risk)? zero coupon, 10 year maturity. zero coupon, 13 year maturity. 8 percent coupon, 10 year maturity. 8 percent coupon, 13 year maturity
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