Why is the interest rate on a U.S. Treasury bond usually less than that on a corporate bond? What factors affect the interest rate paid on a bond?
Define: default risk, default premium, liquidity risk, and liquidity premium. During the late 1970s, Michael Milken convinced many investors that the yields on junk bonds more than compensated for their higher default risk. What do you think happened to the liquidity of these bonds as a result?
At the start of the recession in 2000, interest rates on lower-rated corporate bonds rose relative to the interest rate on Treasury bonds. Why did this happen? Why did it happen? What is this phenomenon called?
Explain the significance of Moody's, MorningStar, and Standard & Poors to the financial system. How are they related to Underwriters Laboratories?
The yield curve over time: http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve
Define: default risk, default premium, liquidity risk, and liquidity premium. During the late 1970s, Michael Milken convinced many investors that the yields on junk bonds more than compensated for their higher default risk. What do you think happened to the liquidity of these bonds as a result?
At the start of the recession in 2000, interest rates on lower-rated corporate bonds rose relative to the interest rate on Treasury bonds. Why did this happen? Why did it happen? What is this phenomenon called?
Explain the significance of Moody's, MorningStar, and Standard & Poors to the financial system. How are they related to Underwriters Laboratories?
The yield curve over time: http://www.smartmoney.com/onebond/index.cfm?story=yieldcurve
posted by Chris at 4:22 PM
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