Bond a has 20 years to maturity and bond b has 10 if


Stock A or B

1. Bond A has 20 years to maturity and Bond B has 10, if interest rates go up, all else equal, which bond will have the greater price decrease.

2. Bond A has a yield to maturity of 8%, Bond B has a yield to maturity of 9%, All else equal if interest rates decrease, which bond will have the higher capital gain?

3. Bond A pays an annual coupon of $100, Bond B pays $40 coupons semi annually, All else equal, which bond has the higher duration.

4. Bond A is a discount bond, Bond B is a premium bond, all else equal, if interest rates remain the same, which bond will increase over the next year?

5. Bond A is a corporate bond, Bond B is a municipal Bond, all esle equal, if you are in a very high tax bracket, which bond should you choose.

6. Yield A is a promised yield, Yield B is an expected yield, for a company recently experiencing financial distress, which yield is likely to be greater

7. Bond A is callable, Bond B is not. Bond A has a coupon of 8.3% and Bond B has a coupon of 8% both bonds are currently selling at par value. If you expect interest rates to rise, which bond should you choose.

8. Bond A is a par bond, Bond B is a discount Bond, if interest rates are expected to fall, all else equal, which bond is more likely to be called.

9. Bond A has a coupon rate of 2% and a yield of 3%. Bond B has a coupon rate of 2% and a yield of 1.5%, Which one has a higher current yield.

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Financial Management: Bond a has 20 years to maturity and bond b has 10 if
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