Differentiate between interest rate risk and reinvestment rate risk.
To which type of risk are holders of long-term bonds more exposed?
Short-term bondholders?
reinvestment rate
Differentiate between mortgage bonds and debentures.
Name the major rating agencies, and list some factors that affect
bond ratings.
Why are bond ratings important both to firms and to investors?
Do bond ratings adjust immediately to changes in credit quality?
Explain.
Differentiate between Chapter 7 liquidations and Chapter 11 reorganizations. When should each be used?
