1. Describe the relationship between a bond investments coupon rate, face value, market interest rate and market price. For a bond with a fixed coupon rate, how would an increase in the market interest rate affect the bonds market price? How would a decrease in the market interest rate affect the bonds market price? 2. At the time the Federal Reserve Board was considering this proposal (201213), were benchmark interest rates relatively high or low? At the time of the proposal, do you think banks expected interest rates to increase or decrease from then (201213) to the present day? How would this increase or decrease in interest rates affect the fair value of banks debt investment portfolios? 3. Explain why banks do not want increased volatility in their regulatory capital.