1. Suppose you purchased a debt obligation three years ago at its par value of $100,000. The market price of this debt obligation today is $90,000. What are some of the reasons why the price of this debt obligation could have declined since you purchased it three years ago?

2. State why you would agree or disagree with the following statement: When interest rates are low, there will be little difference between the Macaulay Duration and the Modified Duration.

3. What is meant by reinvestment risk when purchasing a bond?