Market value of bonds held by the insurance company

Reference no: EM131227182

Event Risk:

An insurance company purchased bonds issued by Hartnett Company two years ago.

Today, Hartnett Company has begun to issue junk bonds and is using the funds to repurchase most of its existing stock. Why might the market value of those bonds held by the insurance company be affected by this action?

Reference no: EM131227182

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