Corporate bonds are often purchased as a conservative investment strategy.
1. What is the difference between a Coupon Bond and a Zero Interest bond?
2. Which one is the best investment? Why?
3. When is a corporate bond a speculative investment?
What are the circumstances when a bond can significantly increase its value on the Secondary Market? When can a bond significantly lose its value on the Secondary Market?
There are several theories that explain how interest rates (cost of funds) are determined.
1. Identify at least three (3) possible effects of an increase in the money supply on interest rates
2. Which one tends to have a negative impact on interest rates? Explain why.
3. Which ones tend to have a positive impact on interest rates? Explain why.