1. All else equal, senior debt generally has a lower yield to maturity than subordinated debt.
2. An indenture is a bond that is less risky than a mortgage bond.
3. Under our bankruptcy laws, any firm that is in financial distress will be forced to declare bankruptcy and then be liquidated.
4. If a bond's coupon rate exceeds its yield to maturity, then its expected return to investors exceeds the yield to maturity.
5. The expected return on a corporate bond will generally exceed the bond's yield to maturity.
This question was asked on Mar 21, 2010.
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