Use Table 2. Which issue has the lowest interest rate risk? ...

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Finance

Use Table 2. Which issue has the lowest interest rate risk?

Select one:

a. 3

b. 2

c. 1

d. 4

2.

Treasury inflation protected securities are subject to _________ risk but are free of _________ risk.

Select one:

a. inflation; interest-rate

b. default; underwriting

c. interest-rate; re-investment

d. interest-rate; inflation

3.

What is the risk of a corporation buying their bonds back before maturity

Select one:

a. interest rate risk

b. purchasing power risk

c. price risk

d. call risk

4.

Which of the following securities are sold via an Underwriter in the primary market and solely via dealers in the secondary market?

Select one:

a. Corporate bond

b. Municipal Bond

c. Treasury Bond

d. A and B

5.

Treasury inflation-indexed (TIPS) bond has a face value of $1,000. It has a coupon rate of 7.00%. The inflation rate over the year is 2.00%. What is the amount of the coupon at the end of the first year?

Select one:

a. $71.40

b. $70.00

c. $20.40

d. $68.63

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