1. A bond which, at the election of the holder, can be swapped for a fixed number of shares of common stock at any time prior to the bond's maturity is called a bond a. zero coupon b. callable c. putable d. convertible e. warrant 2. A bond with a face value of $1,000 has annual coupon payments of $100 and was issued 7 years ago. The bond currently sell for $1,000 and has 8 years remaining to maturity. This bond's must be 10%. I. yield to maturity II. market premium III. coupon rate a. I only b. I and II only c. III only d. I and III only e. I, II and III Which of the following statements regarding bond pricing is true? a. The lower the discount rate, the more valuable the coupon payments are today b. Bonds with high coupon payments are generally (all else the same) more sensitive to changes in 3. interest rates than bonds with lower coupon payments. c. When market interest rates rise, bond prices will also rise, all else the same. d. Bonds with short maturities are generally (all else the same) more sensitive to changes in interest rates than bonds with longer maturities. e. All else the same, bonds with larger coupon payments will have a lower price today