Why are government bonds considered safer to invest in as compared to corporate bonds?

Q: What are the investment characteristics peculiar to real estate that make it riskier than investing…

A: Safety Bonds are comparatively safe as if the more the bonds are safer, lesser will be the interest…

Q: Why might a company choose to raise money through bonds, rather than take out a note payable or…

A: Bonds are the long-term liability of the company where the company raises the money in lieu of…

Q: How can bondholders protect themselves from managers’ actions that negativelyimpact bondholders?

A: The bond features are incorporated in the bond indenture at the time of bond issuance.

Q: Why are UK government bonds considered a risk-free investment? Discuss the risk of exposed to…

A: A bond is a fixed-income instrument that reflects a loan made by an investor to a borrower, and a…

Q: How does our tax system influence the use of debt financing by corporations?

A: Answer: If a company uses debt financing, it will pay interest while if it uses stock, dividends are…

Q: What will happen to the price of bonds, quantity of bonds and interest rate if bonds become riskier…

A: Bonds: An investment in which an investor lends money to a company or government that borrows the…

Q: Define junk bonds and explain how junk bonds became an important factor in corporate bond market.

A: The corporation and government can raise finance by issuing bonds. The borrower i.e bond issuer is…

Q: How do bonds provide financing to corporations for their capital projects? What are the key…

A: A bond is a good source of finance. Payment of coupon at a regular interval help in tax savings.

Q: Compare and contrast corporate bonds with Government        bonds.

A: Bonds refer to the investment securities in which the money is lent by an investor to the company…

Q: How a company takes tax advantage of Bonds Payable (or any other fixed cost financing)?

A: Giving securities is one path for organizations to fund-raise. A bond capacities as a credit between…

Q: Should financial institutions invest in junk bonds?

A: The answer for the theory question on junk bonds is discussed hereunder.  Dear student,  As you have…

Q: A corporation decides to sell its newly issued bonds to pension funds and insurance companies, what…

A: A corporate bond is a debt instrument that a company issues and sells to investors. The company…

Q: Why do most municipal bonds pay lower interest than riskless Treasury bonds?

A: Municipal as well as Treasury bonds are backed by the government and therefore are less risky. The…

Q: Why the existence of rating agencies has lowered returns on corporate bonds?

A: Rating agencies are organizations the access the credit risk of organizations and rate them…

Q: What are stock warrants and convertible debt? How do stock warrants work? How does convertible debt…

A: Stock warrant (SW) is a contract through which investors get rights to purchase the particular…

Q: explain the following investments terms. d) Government Bonds e) Stocks f) Present Value

A:

Q: Why are high-tax-bracket investors more inclined to invest in municipal bonds than low-bracket…

A: Income earned on municipal bonds is exempt from the federal tax, state and local taxes. These are…

Q: What are municipal bonds? What characteristics makes them especially attractive to high-income…

A: The state government issues municipal bonds. They can be thought of as a risk-free investment…

Q: Why are U.S. government securities viewed differently from state and local government securities in…

A: The question is based on the concept of risk of default in bond investment. The default risk is…

Q: The following is not one of the principal types of securities underwritten by investment banks:…

A: Securities underwriting, which attempts to determine hazard and the acceptable value of specific…

Q: Explain how the bond market facilitate government (fiscal) policies. How do you think the bond…

A: The bond market is separated into two sections: main and secondary markets. Because transactions…

Q: How are the Securities Investor Protection Corporation (SIPC) and the Federal Deposit Insurance…

A: An investor is a person who invests money in a stock, bond or in some other security so that return…

Q: xplain how individual securities affect investment portfolio risk. In your answer, when discussing…

A: Portfolio risk - Portfolio risk refers to the possibility that the assets or units in your…

Q: What is the advantage of issuing bonds instead of obtaining financing from the company’s owners?

A:

Q: Why are investment-grade bonds more marketable and why are junk bonds issued at all?

A: Introduction: Bond is nothing but debt securities issued by a company or government if they want to…

Q: STRIPS are:   a) Government-backed schemes that allow investors to hedge against market risk.…

A: STRIPS (Separate Trading of Registered Interest and Principal Securities) was established to give…

Q: How any company is taking tax advantage of bonds payable or any other fixed cost financing?

A: Bond can be considered as an I.O.U between the lender and the borrower that contains details about…

Q: Why are U.S. Treasury bonds not riskless?

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…

Q: What are the similarities and differences between mortgage securities and corporate bonds?

A: Introduction: Mortgage related security is a form of security in which investor collects payment…

Q: But isn't it because when you invest in government bonds it's riskfree and therefore is Lokey wrong?

A: Government bonds are the bonds issued by the government. All payments related to the bond such as…

Q: What are the advantages and disadvantages of buying bonds mutual funds?

A: Bond Mutual Fund is a pool of funds of small investors, where the fund manager invest the money of…

Q: How will investors maximize the returns of corporatebonds or redeem their corporate bonds?

A: Corporate bond is defined as the bond, which is used to issue through the company for increasing the…

Q: Most bonds: Select the correct response: give bondholders a voice in the affairs of the corporation…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: True (t) or False (f) _____ Debt investments are investments in government and corporation bonds

A: Debt investments are investments in a company or firm by borrowing amount through the way of…

Q: Explain why municiple bonds are preferred by certain types of investors.

A: This question pertains to the fact that some sorts of investors prefer municipal bonds.

Q: How do convertible bonds help reduce agencycosts?

A:

Q: Are risk-free rates really risk free? What are the risks of government securities? Why do we still…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Do you think issuing bonds by the government is effective and does it achieve its purpose?

A: Govt bonds are the debt securities issued by the government.

Q: What are call provisions and sinking fund provisions? Do these provisions make bonds more or less…

A: Call provision is an agreement on the bond, that the issuer of the instrument has the right to…