Question

TUSSISCHE DU Annual Coupon Rate 6% Issuing Company Smith Enterprises Irwin Incorporated Johnson Metalworks 12% 9% Each bond h
Based on the preceding Information, which of the following statements are true? Check all that apply. Smiths bonds have the
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Answer #1
orange curve irwin incorporated
green curve johnson metal works
blue curve smith enterprises

2nd part:

The bonds will have same expected total return.

The expected capital gains yield for Irwin's bond is negative.

explanation:

The total return of the bonds will be equal to the YTM.

Since Irwin bonds are issued at a premium and will be redeemed at par value, their capital gain will be negative.

3rd part:

New issue.

Sine Smith just registered and issued its bonds, and issued it for the first time, the bonds would be referred to as new issue.

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