1. What is the difference between mezzanine debt and senior debt? Why use mezzanine debt to buy a shopping centre? Why use senior debt to buy a shopping centre?
2. Two bonds are available for purchase in the financial markets. The first bond is a 5 year, $1000 bond that pays an annual coupon of 10%. The second bond is a 5 year, $1000 zero coupon bond.
What is the duration of these bonds two years in the future, if the YTM remains at 8%?