BADM*3160 Chapter Notes - Chapter 6: Current Yield, High-Yield Debt, Yield Curve

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1 Feb 2019
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Corporate finance quiz #2: chapter 6 valuing bonds. Yield curves are always upward sloping: short-term interest rates to rise, with ,000 for two years, you can invest in a one-year government of canada strip yielding 9. 5% or a two-year strip paying 10 percent per year. Yield curves are always upward sloping. long-term bonds to be less risky than short-term bonds: suppose a 25-year bond and a 2-year bond have the same coupon rate. Investment grade: speculative grade, junk bond, none of the answers are correct, bond ratings measure a bond"s interest rate risk, default premium. liquidity premium, duration, credit risk, suppose a bond gets upgraded to a higher rating. A year later, the bond price is ,100. Face value of the bond is ,000: what is the yield to maturity on the bond today? (round your answer to 2 decimal places. ) What is the yield to maturity on the bond in one year? (round your answer to 2 decimal places. )

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