Assignment:
a. Why is it important for corporate managers to understand how bonds and stocks are priced?
b. Holding constant an asset's future benefit stream, what happens to the asset's price if its risk increases?
c. Holding constant an asset's risk, what happens to the asset's price if its future benefit stream increases?
d. How is a bond's coupon rate different from its coupon yield?
e. Explain what is meant by the term interest rate risk.