Homework Answers
Answer. BBB
Any bond with lower grading than BBB are called high risk high yield bond. As the grading downs risk increases and at D rating it will be defaulting bond or junk bonds. So investment is advised till the rating is BBB OR MORE
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What is the lowest grade of the investment grade bonds? AAA BBB B С D None...
bonds with relatively low risk of default are called 1) Bonds with relatively low risk of...
bonds with relatively low risk of default are called
1) Bonds with relatively low risk of default are called securities and have a rating of Baa (or BBB) a above; bonds with ratings below Baa (or BBB) have a higher default risk and are called A) investment grade; lower grade C) high quality; lower grade B) investment grade; junk bonds D) high quality; junk bonds 2) Which of the following bonds are considered to be default-risk free? A) municipal bonds...
1. Bonds with a rating of AAA through BBB- are called ________, while bonds with ratings...
1. Bonds with a rating of AAA through BBB- are called ________, while bonds with ratings BB or below are called _________.
find the approximate spread between AAA and BBB rated bonds. There are many sources you can...
find the approximate spread between AAA and BBB rated bonds. There are many sources you can utilize to find this data. Discuss why this spread exists. If a AAA and BBB rated bond have the same duration and convexity will they have the same level of interest rate risk? Why or why not?
What is the minimum rating required for a bond to be considered investment grade? AA OA...
What is the minimum rating required for a bond to be considered investment grade? AA OA BB BBB None of the above.
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%and on bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond if the total investment is $26.000, and the investor wants an annual return of $1620 on the three investments The client should investsin AAA bonds,...
19) curity: AAA Corporate 56 AA Corporate A Corporate BBB Corporate BB Corporate ield (%): A...
19) curity: AAA Corporate 56 AA Corporate A Corporate BBB Corporate BB Corporate ield (%): A mining company needs to raise $100 million in order to begin open-pit mining of a coal seam. The company will fund this by issuing 30-year bonds with a face value of $1,000 and a coupon rate of 6.5%, paid annually. The above table shows the yield to maturity for similar 30-year corporate bonds of different ratings. If the company's bonds are rated A, what...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 4%, on A bonds 6%, and on B bonds 11%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $18,000, and the investor wants an annual return of $1,120 on the three investments....
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $26,000 and the investor wants an annual return of $1,620 on the three investments....
What is the minimum rating required for a bond to be considered investment grade? Question 10...
What is the minimum rating required for a bond to be considered investment grade? Question 10 options: AA A BB BBB None of the above.
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%,on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in A...
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%,on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $23 000, and the investor wants an annual return of $1430 on the three investments....
bonds with relatively low risk of default are called
1) Bonds with relatively low risk of default are called securities and have a rating of Baa (or BBB) a above; bonds with ratings below Baa (or BBB) have a higher default risk and are called A) investment grade; lower grade C) high quality; lower grade B) investment grade; junk bonds D) high quality; junk bonds 2) Which of the following bonds are considered to be default-risk free? A) municipal bonds...
What is the minimum rating required for a bond to be considered investment grade? AA OA BB BBB None of the above.
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%and on bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond if the total investment is $26.000, and the investor wants an annual return of $1620 on the three investments The client should investsin AAA bonds,...
19) curity: AAA Corporate 56 AA Corporate A Corporate BBB Corporate BB Corporate ield (%): A mining company needs to raise $100 million in order to begin open-pit mining of a coal seam. The company will fund this by issuing 30-year bonds with a face value of $1,000 and a coupon rate of 6.5%, paid annually. The above table shows the yield to maturity for similar 30-year corporate bonds of different ratings. If the company's bonds are rated A, what...
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