Problem
What is the difference between the following?
The coupon rate and the current rate of interest
Debentures and secured bonds
A sinking fund and a call feature
Zero coupon and coupon bonds
High yield an investment grade bonds
Answer the following questions
1) What is the relationship between interest rates and bond prices?
2) What is the relationship between interest rates and the length of time to maturity?
3) Even though bonds are debt obligations, investing in bonds entails risks. What are the main sources of risk? What role do rating services play in managing the risk?