1. If interest rates rise from 3 percent to 4 percent, which of the following bonds will have the largest percentage decrease in its value?
A 10-year zero-coupon bond.
A 10-year bond with a 10 percent semiannual coupon.
A 10-year bond with a 10 percent annual coupon.
A 5-year zero-coupon bond.
A 5-year bond with a 12 percent annual coupon.
2. Asset-based lenders avoid inventory-only deals; they prefer to make loans backed by inventory and:
a. experienced management.
b. good market reputation.
c. more secure accounts receivable.
d. All of these