a 6. A bond issued by Apple Inc. in Japan in Japanese Yen is a...

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a 6. A bond issued by Apple Inc. in Japan in Japanese Yen is a (foreign bond, domestic bond, or Eurobond?) and a bond issued by Apple Inc. in Australia in U.S. Dollars is (foreign bond, domestic bond, or eurobond?). 7. If you bought the bond at a premium, holding everything else constant, the bond price will (rise or fall?) over time. 8. The relation between bond price and bond yield is 9. Consider a fixed coupon bond and a zero coupon bond (ZCB). Assume they have the same maturity and required yield. The fixed coupon bond has (higher or lower) interest rate risk than the ZCB, and has (higher or lower) reinvestment risk than the ZCB. 10. Rank the following bonds in order of descending duration (from high to low). Hint: No calculations needed. Think about the relations between duration and coupon rate, maturity, and yield. Answer: Bond Coupon Time to Maturity Yield to Maturity A 8% 20 years 7% B 8% 15 years 7% 9% 15 years 9% D 9% 15 years 7% E 10% 10 years 9%

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