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 Investment Grade to High-Yield 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 Spreads
- Consider the Macroeconomic circumstance under which Credit Spreads will narrow and widen.
- Utilize Credit Spreads in a predictive manner.