1. Passive bond portfolio managers assume the bond market is (a) semi-strong form efficient. (b) inefficient. (c) strong form efficient. (d) not correlated with the stock market. 2. The length of time until a bond will make its last payment is its (a) coupon rate. (b) yield-to-maturity. (c) promised yield-to-maturity. (d) term-to-maturity. 3. If a bonds price is above its par value, its coupon rate will be (a) equal to its term-to-maturity. (b) greater than its yield-to-maturity. (c) equals its yield-to-maturity. (d) greater than its term-to-maturity. 4. If a bonds market price decreases, its (a) yield-to-maturity increases. (b) coupon rate decreases. (c) yield-to-maturity decreases. (d) coupon rate decreases. 5. A pricing theorem for the bond market states that if a bonds yield does not changeover its life, then the size of its discount or premium will ___ as its life gets shorter. (a) increases. (b) slightly increase. (c) decrease. (d) stay the same. 6. A pricing theorem for the bond market states that if a bonds yield does not changeover its life, then the size of its discount or premium will ___ at an increasing rate as its life gets shorter. (a) slightly increase. (b) increase. (c) slightly decrease. (d). decrease 7. ___ is the tendency for the bond prices to change asymmetrically relative to yield changes. (a) Immunization. (b) Concavity. (c) Convexity. (d) Rebalancing. 8. ___ is a measure of average maturity of the stream of payments associated with a bond. (a) Cash flow matching. (b) Pure yield pickup. (c) Contingent immunization. (d) Duration. 9. Duration is a ___ of the lengths of time until remaining payments are made. (a) weighted average. (b) moving average. (c) sensitivity measure. (d) arithmetic average. 10.Holding maturity constant, a bonds duration is ___ when the coupon rate is lower. (a) lower. (b) higher. (c) the same. (d) slightly higher. 11.Immunization is accomplished by calculating the duration of the promised outflows and then investing in a portfolio of bonds that has a(n) ___ duration. (a)longer. (b) shorter. (c) identical. (d) slightly shorter. 12.___ management of a bond portfolio is based on the belief that the bond market is not perfectly efficient. (a) Passive. (b) Buy-and-Hold. (c) Dynamic. (d) Active.