1. A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is NOT CORRECT?

Answer

		The bond's yield to maturity is 9%.
		The bond's current yield is 9%.
		If the bond's yield to maturity remains constant, the bond will continue to sell at par.
		The bond's current yield exceeds its capital gains yield.
		The bond's expected capital gains yield is positive.

2. A $250,000 loan is to be amortized over 8 years, with annual end-of-year payments. Which of these statements is CORRECT?

Answer

		The proportion of interest versus principal repayment would be the same for each of the 8 payments.
		The annual payments would be larger if the interest rate were lower.
		If the loan were amortized over 10 years rather than 8 years, and if the interest rate were the same in either case, the first payment would include more dollars of interest under the 8-year amortization plan.
		The proportion of each payment that represents interest as opposed to repayment of principal would be lower if the interest rate were lower.
		The last payment would have a higher proportion of interest than the first payment.