QUESTION 17 If a bond's rating improves it should cause: a. The bond's price to decrease...
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 5.0% and Baa bonds yield 6.0%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa? Bond price $ b. What is the bond's price if it is rated as Baa? Bond price $
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 3.6% and Baa bonds yield 4.3%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa? Bond price b. What is the bond's price if it is rated as Baa? Bond price
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 4.8% and Baa bonds yield 5.8%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa? Bond price $ b. What is the bond's price if it is rated as Baa? Bond price $
A bond's credit rating provides a guide to its price. Assume Aaa bonds yield 5.2% and Baa bonds yield 6.2%. Assume a 10% five-year bond with annual coupons and a face value of $1,000. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. What is the bond's price if it is rated as Aaa? Bond price $ b. What is the bond's price if it is rated as Baa? Bond price $
The default-risk premium: a) should vary directly with the bond's yield and inversely with its price. b) is less than 0 (zero) for a U.S. Treasury bond. c) should be lower for a highly speculative bond than for an investment-grade bond. d) should vary directly with the bond's yield and the bond's price.
Question 40 An increase in the supply of gasoline, ceteris paribus, will cause equilibrium price: To rise and quantity to fall. To fall and quantity to rise. And quantity to rise. And quantity to fall Question 41 Assume two goods are substitutes. Ceteris paribus, a decrease in the price of one good will cause the equilibrium price of the other good to: Increase and the equilibrium quantity of the other good to increase Increase and the equilibrium quantity of the...
Which of the following will cause the stock price to decrease if you assume that the constant growth pricing model [P(0) = D(1) / (r(s) – g)] is correct: Increase in Dividends Increase in the required rate of return Increase in the growth rate Decrease in the Required Rate of Return and increase in dividends
Which of the following would cause a decrease in a firms stock price, all else held constant? O A. An increase in the growth rate O B. An increase in investor risk aversion O C. A decrease in the risk of the firm OD. None of the above
In the short run, a decrease in consumption will cause a(n) a) increase in price and output levels b) decrease in price and output levels c) decrease in the price level and no change in output d) increase in the price level and a decrease in output
10. Bond ratings Aa Aa Rating agencies-such as Standard & Poor's (S&P), Moody's Investor Service, and Fitch Ratings-assign credit ratings to bonds based on both quantitative and qualitative factors. These ratings are considered indicators of the issuer's default risk, which impacts the bond's interest rate and the issuer's cost of debt capital. Based on these ratings, bonds are classified into investment-grade bonds and junk bonds. Which of the following bonds is likely to be classified as a junk bond? OA...