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Holding all else equal, an unexpected fall in interest rates will cause the value of...

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Finance

Holding all else equal, an unexpected fall in interest rates will cause the value of a given outstanding call option to __________.

A. increase
C. decrease
D. none of the above

B. remain constant

Interest rate risk is apt to be highest for holders of __________.

A. T-bills
D. long-term bonds with high coupon interest rates
B. money market funds

C. long-term bonds with low coupon interest rates

A ratio that is important in bond credit analysis is the ___________ ratio, which is EBITDA divided by interest payments. This calculates how much operating income a company has to pay the ongoing debt service.

C. spread
D. retention
A. blanket
B. coverage

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