13.1: Chapter Thirteen- Learning Outcomes
Learning Outcomes
In this chapter you will:
- Distinguish between the return on an investment and the firm’s Cost of Capital .
- Define various qualitative bond risks .
- Contrast Price or Interest Rate Risk versus Reinvestment Rate Risk .
- Compare Inves t ment Grade to High- Y ield Bonds , and their different Credit Ratings .
- Discuss Liquidity Preference Theory and its impact on the slope of the Yield Curve .
- Define each of four Yield Curve Theories .
- Calculate the Spot Curve .
- Explore Credit Spread s
- Consider the Macroeconomic circumstance under which Credit Spreads will narrow and widen .
- Utilize Credit Spreads in a predictive manner .