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Which of the following would likely cause a bond to have a lower market value? (Hint: consider the inverse relationship between interest rates and bond
Which of the following would likely cause a bond to have a lower market value? (Hint: consider the inverse relationship between interest rates and bond prices; determine if each situation given would result in a higher or lower interest rate) I. The issuers credit rating changed from A to AA. II. The issuers credit rating changed from AA to A. III. The YTM of comparable securities rose. IV. The YTM of comparable securities declined. V. The bond included a call feature. II, III and V. II, IV and V. II and IV. I, III and IV.
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