Question 13. 13. (I) The coupon rate is the rate of interest that the issuer of

Question

Question 13.13. (I) The coupon rate is the rate of interest that the issuer of the bond must pay.
(II) The coupon rate on old bonds fluctuates with market interest rates so they
will remain attractive to investors. (Points : 3)        (I) is true; (II) is false
       (I) is false; (II) is true
       Both statements are true
       Both statements are false Question 14.14. Governments do not issue stocks because: (Points : 3)        they cannot sell ownership claims
       they cannot sell debt claims
       the Constitution expressly prohibits it
       they cannot compete effectively with corporations relative to profits Question 13.13. (I) The coupon rate is the rate of interest that the issuer of the bond must pay.
(II) The coupon rate on old bonds fluctuates with market interest rates so they
will remain attractive to investors. (Points : 3)        (I) is true; (II) is false
       (I) is false; (II) is true
       Both statements are true
       Both statements are false

Explanation / Answer

13.

(I) is true; (II) is false

because coupon rate does not fluctuates for the old bonds as it remains same.

14.

they cannot sell ownership claims

the above is the answer

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