_. The University of Memphi - Quiz Intermediate Managerial...

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Please Note: It is recommended that you save your response as you complete each question. Question 1 (1 point) Save If the required rate of return on a bond is greater than its coupon interest rate (and rd remains above the coupon rate), the market value of that bond will always be below its par value until the bond matures, at which time its market value will equal its par value. (Accrued interest between interest payment dates should not be considered when answering this question.) True False Question 2 (1 point) Save A bond that is callable has a chance of being retired earlier than its stated term to maturity. Therefore, if the yield curve is upward sloping, an outstanding callable bond should have a lower yield to maturity than an otherwise identical noncallable bond. True False Question 3 (1 point) Save Which of the following statements is most correct? a) All else equal, long-term bonds have more interest rate risk than short term bonds b) All else equal, higher coupon bonds have more reinvestment risk than low coupon bonds c) All else equal, short-term bonds have more reinvestment risk than do long-term bonds d) All of the statements above are correct Question 4 (1 point) Save Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds?
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