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Briefly describe what type of investor would choose municiple bonds and why?
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Solved in 2 steps
- What is a bond? What are some features of a bond? How do you value bonds? What factors can affect that value?Which is riskier to an investor, other things held constant—a callable bond or aputable bond? Explain.. What is interest rate risk and what is the relation between interest rate risk and callable bonds. Explain with the help of an example of your own choice.
- What impact do interest rates have on bond prices? What are the key assumptions that go into determining the value of a bond?What is the difference between callable and putable bonds?How does one determine the required rate of return of a bond, the cash flows of a bond and the value of a bond? How do you determine if a bond is a good investment? Are long-term bonds riskier than short-term bonds? Explain and Discuss.