FIN 571 TUTOR Motivated Minds/fin571tutor.com FIN 571 TUTOR Motivated Minds/fin571tutor.com | Page 40

What is ethics? If you follow all applicable rules and
regulations, are you an ethical person?
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FIN 571 Week 1 DQ 2
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Assume that interest rates have increased substantially. Would
this tend to increase or decrease
the market value (meaning the price an investor in the firm's
paper is willing to pay) of a firm’s liabilities (relative to the
book value of liabilities)?
This question is referring to a firm's liability such as a bond or
debenture that has been issued in the markets. What happens to
the price an investor who is looking to purchase that bond or
debenture is willing to pay if the market interest rate increases
above the rate that the bond or debenture pays.
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