Normally, long-term bonds offer _____(i)_____ yield to maturity because they are ____(ii)____ and investors expect interest rate to _____(iii)_____ in the long run.Question 11Select one:a.(i) lower; (ii) safer; (iii) decreaseb.(i) higher; (ii) riskier; (iii) increasec.(i) higher; (ii) safer; (iii) decreased.(i) lower; (ii) risker; (iii) increase

An increase in the riskiness of corporate bonds will ________ the yield on corporate bondsand ________ the yield on Treasury securities, everything else held constant.A) increase; increaseB) reduce; reduceC) increase; reduceD) reduce; increase

f an investor may have to sell a bond prior to maturity and interest rates have risen since the bond was purchased, the investor is exposed to A perpetuity The coupon effects An indefinite maturity Interest rate risk

If the expected return on bonds increases, all else equal, the demand for bonds increases,the price of bonds ________, and the interest rate ________.A) increases; decreasesB) increases; increasesC) decreases; decreasesD) decreases; increases

Which of the following statements is FALSE?a.The time remaining until the repayment date is known as the term of the bond.b.Bonds are usually less risky than shares.c.Bonds are securities sold by governments and corporations to raise money from investors today in exchange for promised future payments.d.By convention the coupon rate is expressed as an effective annual rate.e.Bonds typically make two types of payments to their holders.

A bond that is held to maturity A. will necessarily have a yield to maturity equal to the coupon rate. B. will necessarily earn the yield to maturity at the time of purchase. C. may earn more or less that its yield to maturity at the time of purchase because the rate at which coupons can be reinvested may change. D. will earn the yield to maturity at the date of maturity.