Finance

posted by .

Most institutional investors purchase long-term bonds, as assets for their investment portfolios, to offset long-term liabilities they have on their balance sheets. Which statement below helps explain why do they not like call provisions in bonds? (Points: 4)
Adding a call provision with a premium compensates them for their troubles.
Having a bond called may mean the fund must reinvest in other bonds, which pay lower yields to maturity.
Bonds that are called can always be re-invested at higher rates.
Bonds that are called mean the company became riskier.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    Some institutional investors prefer zero coupon bonds over coupon bonds of the same maturity (and same quality). They will ever purchase a lower YTM zero coupon than the same maturity coupon bond. Which statement below best describes …
  2. Finance

    Rollincoast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 11.5%. Long-term risk-free government bonds were yielding 8.7% at that time. The current risk premium on BBB bonds versus government bonds …
  3. Finance

    Rollincoast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 11.5%. Long-term risk-free government bonds were yielding 8.7% at that time. The current risk premium on BBB bonds versus government bonds …
  4. Finance

    if an investor is contemplating purchasing long-term securities,what are the factors he/she should take into consideration in selecting among government bonds,semi government bonds or corporation bonds?
  5. accounting

    :The balance sheet for Glenwood Corporation at December 31, 2011, showed the following subtotals: Current Assets $140,000 Current Liabilities 80,000 Property & Equipment 420,000 Total Stockholders' Equity 420,000 Retained Earnings …
  6. Finance

    P2. Use your knowledge of balance sheets to fill in the missing amounts: Assets: CASH - $10,000 ACCOUNTS RECEIVABLE - $100,000 INVENTORY - $------ TOTAL CURRENT ASSETS – $220,000 GROSS PLANT AND EQUIPMENT – $500,000 LESS: ACCUMULATED …
  7. ACCT 2100

    The bookkeeper for Andy’s Country Music Bar went insane and left this incomplete balance sheet. Andy’s working capital is $95,000 and its debt to assets ratio is 40 percent. Required: Complete the balance sheet by supplying the …
  8. buisness finance

    Series Average return Standard Deviation Large-company stocks 10.7 % 19.3 % Small-company stocks 16.4 33.0 Long-term corporate bonds 6.2 8.4 Long-term government bonds 6.1 9.4 Intermediate-term government bonds 5.6 5.7 U.S. Treasury …
  9. Finance

    As an investor, you are considering an investment in the bonds of the Conifer Coal Company. The bonds, which pay interest semiannually, will mature in 8 years, have a coupon rate of 9.5% on a face value of $1,000. Currently, the bonds …
  10. Pre-Calculus

    An investor has $100,000 to invest in three types of bonds: short-term, intermediate-term, and long-term.How much should she invest in each type to satisfy the given conditions?

More Similar Questions