1. A bond portfolio has the following three fixed-rate bonds. Assume annual coupon payments and no accrued interest on the bonds. Prices are per 100 of par value. Bond Maturity (years) Market Value Price Coupon Yield-toMaturity Modified Duration A 6 170,000 85.00 2.00% 4.95% 5.42 B 10 120,000 80.00 2.40% 4.99% 8.44 C 15 100,000 100.00 5.00% 5.00% 10.38 The bond portfolios modified duration is closest to: a) 8.75 years. b) 9.08 years. c) 7.62 years.

2. Which of the following is not related to credit risk: a) Interest Rate Risk b) Default Risk c) Credit migration risk

3. The best way to define credit risk is: a) The risk of not receiving full interest and principal payments on a timely basis. b) The risk that the price at which investors can actually transact differs from the quoted price in the market. c) Risk that spreads widen on a security as a result of a lack of liquidity in the market.

4. Which of the following corporate debt instruments has the highest senior seniority ranking in the list provided below? a) Subordinated Debt b) Senior Unsecured Debt c) First Lien Debt Senior Secured