2. Will a bond that allows the borrower to repay the loan early have a higher or a lower promised interest rate than an identical bond that does not allow early repayment? Why?
4. Explain the mechanics of a credit default swap.
6. Using information from a current newspaper or the internet, what is the annualized yield on corporate bonds (high-quality, medium-quality, high-yield) today?
8. Does a higher reward (expected rate of return) always come with more risk?
10. Would a single individual be effectively more, equally, or less risk-averse than a pool of such investors?