1. Mortgage Vs. Discount Bond. Which one of these securities is the lowest risk?WHY?

2. A 3-year bond pays interest annually. Its par value is $ 1,000 and its coupon rate equals 7%. If the bond's required return on the bond is 9%, what is the bond's market price?

3. The contract between a bond issuer and a bondholder is called:

a) an indenture.

b) a debenture.

c) a collateral.

d) a general obligation.

e) All above is correct.

4. Municipal bondholder gets higher return than Federal bondholder.

a) True

b) False

c) Return for both bondholders are similar