When interest rates fall, the price of a callable bond will:A.rise more than an option-f

Given two otherwise identical bonds, when interest rates rise, the price of Bond A declines more than the price of Bond B.Compared to Bond B, Bond A most likely:

A.is callable.

B.has a lower coupon.

C.has a shorter maturity.

A BBB-rated corporation wishes to issue debt to finance its operations at the lowest cost possible. If it decides to sell a pool of receivables into a special purpose vehicle (SPV), its primary motivation is most likely to:

A. allow the corporation to retain a first lien on the assets of the SPV.

B. segregate the assets into a bankruptcy-remote entity for bondholders.

C. receive a guaranty from the SPV to improve the corporation’s credit rating.

Mingle Corporation sold its receivables to a special purpose vehicle, MGT Corporation, created by Mingle for that purpose. If MGT sells securities backed by the receivables, the credit rating associated with those securities will most likely be based on the:

A. creditworthiness of Mingle.

B. creditworthiness of MGT.

C. collateral and credit enhancement mechanisms used.

An analyst is evaluating various debt securities issued by a company. The type of

security that is most likely to yield the lowest recovery in a bankruptcy is a:

A. debenture bond.

B. collateral trust bond.

C. mortgage bond.