.... T-Mobile LTE 2:43 PM Donfomework for Chapters 20 & @66% 21.doc 36. An example of an investment grade corpore would be one rated (a) B. (e) C. (b) D. (c) BBB. (d) BB. 37. Among similar corporate bonds, the one with the highest market price would be the one with a rating of (c) B. (d) BBB. (a) A. (e) C. (b) CCC. 38. The major factor resulting in a decrease a bond's rating is (a) decrease in marketability. increase in default risk. (c) the call provision. increase in its coupon rate. (b) (d) an (e) a longer time to maturity. 39. Fundamental bond analysis would lead an investor to (a) buy a bond before a rating upgrade. (b) sell a bond before a rating upgrade. (c) use a passive policy since the market is efficient. (d) buy a bond before a rating downgrade. (e) ignore bond ratings. comised feld-to-maturity of premium 2%. Its exne maturity is (a) (e) 6%. (b) 49 Ask icia-to- (d) 16%. 41. A and has Peca yield-to of 6% anu un @hability of dof???? the bond derauits receive 20% of the If fairl Courses Calendar To Do Notifications Inbox
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Bond J has a coupon rate of 5 percent. Bond K has a coupon rate of 11 percent. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond J? A. -10.95% B. -9.95% C. -11.95% D. -11.93% If interest rates suddenly rise by 2 percent, what is the percentage price change of Bond K? A. -10.58% B. 32.21% C. -8.60% D. -10.60% If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond J? A. 13.95% B. -17.48% C. 13.93% D. -11.97% If interest rates suddenly fall by 2 percent, what is the percentage price change of Bond K? A. -10.62% B. 18.48% C. 12.15% D. 12.27%
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