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1. If a bond is selling for more than its par value and the market interest rate remains unchanged during the life of the bond,

1.

If a bond is selling for more than its par value and the market interest rate remains unchanged during the life of the bond, then as the maturity date approaches, how will the price (value) of the bond change?

a.

Remain unchanged
b.

Increase
c.

Cannot determine
d.

Decrease

2.

Which of the following portfolios have the least risk?

a.

A portfolio of U.S. common stocks of small firms
b.

A portfolio of long-term United States Government bonds
c.

A portfolio of Treasury bills
d.

A portfolio of AAA-rated corporate bonds

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