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Which is correct for the company bond price

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Reference no: EM132906730

Problem 1: Which of the following is correct for the company's bond price when the default risk of that company increases (when the future prospect of the company becomes poor)?

Option 1: YTM increases therefore the price of the bond increases

Option 2: YTM decreases therefore the price of the bond decreases

Option 3: YTM decreases therefore the price of the bond increases

Option 4: YTM increases therefore the price of the bond decreases

Reference no: EM132906730

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