Explain how a bond fund lowers the risk of owning bonds, which is already considered safer than stock.

Why might an investor choose a secured bond rather than an unsecured bond? Why would an investor prefer a convertible bond?

Why would investors choose a zero-coupon bond? Explain why zero-coupon bonds are often considered to be the riskiest form of bond investment.

With corporate taxes as the only market imperfection, how does the value of the firm with leverage differ from its value without leverage?

Explain why you might choose a municipal bond paying 5 percent over a corporate bond paying 7 percent.

Under what conditions would bonds sell at a premium?

Brian has narrowed his choice of bond purchases to two: Me/Mac is a $70,000, 7 percent corporate bond selling for 102; BrgPort is a$10,000, 5 percent municipal bond selling for 95. Compute the current yield of each bond and advise him about which bond to choose.

Why might an investor choose to buy bonds rather than stocks? As a bondholder, would your investment in a corporate bond be more secure than a stockholder's investment? Why or why not?

Tatanya is considering purchasing a $10,000 corporate bond yielding 9 percent. She also found that she could buy a$10,000, 7 percent municipal bond. Her federal income tax rate is 28 percent. Determine her net interest. Show your work.

Tatanya is considering purchasing a $10,000 corporate bond yielding 9 percent. She also found that she could buy a$10,000, 7 percent municipal bond. Her federal income tax rate is 28 percent. Determine her net interest. Show your work.

Would you choose to buy a Treasury security through a full -service broker, discount broker, bank, or TreasuryDirect? Why?

Les has chosen to buy a 5.5 percent, $7,000 corporate bond. The bond currently sells for 106. Compute his current yield on the bond, and explain to him why it is not the same as the stated interest rate.

Tatiana is considering purchasing a 10,000$,$9$percent corporate bond. She also found that she can buy a$ $10,000$, $7$ percent municipal bond. Her federal income tax rate is $28$ percent . Determine her net interest. Show your computations.

What is a major advantage of buying government and municipal bonds?