[Solved] Everything Else Held Constant,if the Tax-Exempt Status of Municipal Bonds

A(n)________ in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds,all else equal. A)increase;increase;decrease B)increase;decrease;decrease C)decrease;increase;increase D)decrease;decrease;decrease

An increase in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield of Treasury bonds,everything else held constant. A)increase;increase B)reduce;reduce C)increase;reduce D)reduce;increase

A decrease in the liquidity of corporate bonds will ________ the yield of corporate bonds and ________ the yield of Treasury bonds,everything else held constant. A)increase;increase B)decrease;decrease C)increase;decrease D)decrease;increase

The risk premium on corporate bonds reflects the fact that corporate bonds have a higher default risk and are ________ U.S. Treasury bonds. A)less liquid than B)less speculative than C)tax-exempt unlike D)lower-yielding than

Which of the following statements is TRUE? A)State and local governments cannot default on their bonds. B)Bonds issued by state and local governments are called municipal bonds. C)All government issued bonds-local,state,and federal-are federal income tax exempt. D)The coupon payment on municipal bonds is usually higher than the coupon payment on Treasury bonds.

Municipal bonds have default risk,yet their interest rates are usually lower than the rates on default-free Treasury bonds. This suggests that A)the benefit from the tax-exempt status of municipal bonds is less than their default risk. B)the benefit from the tax-exempt status of municipal bonds equals their default risk. C)the benefit from the tax-exempt status of municipal bonds exceeds their default risk. D)Treasury bonds are not default-free.

Everything else held constant,an increase in marginal tax rates would likely have the effect of ________ the demand for municipal bonds,and ________ the demand for U.S. government bonds. A)increasing;increasing B)increasing;decreasing C)decreasing;increasing D)decreasing;decreasing

Everything else held constant,a decrease in marginal tax rates would likely have the effect of ________ the demand for municipal bonds,and ________ the demand for U.S. government bonds. A)increasing;increasing B)increasing;decreasing C)decreasing;increasing D)decreasing;decreasing

Everything else held constant,the interest rate on municipal bonds rises relative to the interest rate on Treasury securities when A)income tax rates are lowered. B)income tax rates are raised. C)municipal bonds become more widely traded. D)corporate bonds become riskier.

Everything else held constant,if income tax rates were lowered,then A)the interest rate on municipal bonds would fall. B)the interest rate on Treasury bonds would rise. C)the interest rate on municipal bonds would rise. D)the price of Treasury bonds would fall.