1) For the same change in interest rates bondholders will realize:

A. a greater capital gain when rates rise than capital loss when rates fall

B. a greater capital gain when rates fall than capital loss when rates rise

C. a greater capital loss when rates rise than capital gain when rates fall

D. a greater capital loss when rates fall than capital gain when rates rise

E. the same capital gain or loss when rates rise or fall

2) Two bonds with different coupon amounts are priced to yield the same yield to maturity. For a given change in market rate:

A. the bond with the lower coupon will always change more in price than the bond with the higher coupon.

B. the bond with the higher coupon will always change more in price than the bond with the lower coupon.

C. the bond with the lower coupon rate will only change more in price than the bond with the higher coupon rate if the market rate decreases.

D. The bond with the higher coupon rate will only change more in price than the bond with the lower coupon rate if the market rate increases.

E. the price change will be the same for both bonds.