1. Inflation rose to 7%. Most economists expected 8%. Holding everything else constant, How do you think the bond market would react to this news?

A. Market Rally (prices up / rates down)

B.Market Sell-Off (prices down / rates up)

C.no change expected

D. not enough information provided

2.What would you expect to happen to the stock market if we entered a period of high uncertainty?

A. Market rally because the market risk premium would be rising.

B. Market sell-off because the market risk premium would be falling.

C. Market rally because the market risk premium would be falling.

D. Market sell-off because the market risk premium would be rising.