1. For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain. a) a bond of the

[answerhappygod]

1. For each of the following pairs, which bond would you expect
to pay a higher interest rate? Explain.
a) a bond of the U.S. government or a bond of an Eastern
European government
b) a bond that repays the principal in the year 2020 or a bond
that repays the principal in the year 2040
c) a bond from Coca-Cola or a bond from a software company you
run in your garage
2. Many workers hold large amounts of stock issued by the firms
at which they work. Why do you suppose companies encourage this
behavior? Why might a person not want to hold
stock in the company where he works?