For a conventional bond paying a fixed coupon rate, an INCREASE in the risk of default would lead to: a. A fall in the market price, to ensure that bondholders receive a higher yield. b. A rise in the market price, to ensure that bondholders receive a higher yield. c. A fall in the market price, to ensure that bondholders receive a lower yield. d. A rise in the market price, to ensure that bondholders receive a lower yield.

For a conventional bond paying a fixed coupon rate, an INCREASE in the risk of default would lead to: a. A fall in the market price, to ensure that bondholders receive a higher yield. b. A rise in the market price, to ensure that bondholders receive a higher yield. c. A fall in the market price, to ensure that bondholders receive a lower yield. d. A rise in the market price, to ensure that bondholders receive a lower yield.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 15QTD

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