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Does a steady low-volatilty enviroment, increase, decrease, or have no effect on the credit spread for a corporate bond?
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- If a new competitor with scale enters, does that increase, decrease, or have no effect on the credit spread for a corporate bond?If CDS spreads widen, does that increase, decrease, or have no effect on the credit spread of a corporate bond?1. When the Fed purchases treasuries to supply market liquidity, does that increase, decrease, or have no effect on the credit spread for a corporate bond?
- Which of the following statements is correct? Credit spreads decrease with volatility Credit spreads increase with volatility Credit spreads do not depend on volatility The relation between credit spreads and volatility is nonlinear Which of the followings is not an important determinant of bond credit ratings? corporate governance risk business risk interest rate risk financial riskThe yields on a corporate bond differ from those on a comparable treasury security primarily because of(please correct and incorrect option explain) Which of the following statements is correct? Credit spreads decrease with volatility Credit spreads increase with volatility Credit spreads do not depend on volatility The relation between credit spreads and volatility is nonlinear Which of the followings is not an important determinant of bond credit ratings? corporate governance risk business risk interest rate risk financial risk
- Why the existence of rating agencies has lowered returns on corporate bonds?Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a company. A company earns a lower return with borrowed funds than it pays in interest.Why might a company choose to raise money through bonds, rather than take out a note payable or issue stock? What are the advantages and disadvantages of bonds? What does it mean to issue a bond at a "premium" or at a "discount"?
- What is a bond? Why might a company elect to sell bonds rather than borrow from a bank?How would a financial institution with a large bond portfolio be affected by falling interest rates? Would it be affected by a greater degree than a financial institution with a greater concentration of bonds (and fewer short-term securities)?Why are long-term corporate bonds higher risk than short-term corporate bonds? Provide an example.
