1. The coupon rate is the interest rate that determines how much interest is paid on a bond contract. True False 2. A bond has a coupon rate of 10%. If the YTM on the bond is 8%, this bond should sell at a discount from face valu True False 3. Longer maturity bonds possess greater price risk (volatility) than otherwise identical shorter maturity bonds. True False 4. If we increase the discount rate when calculating a present value, the present value declines. True False 5. When the economy is expected to be strong, and short-term interest rates are expected to increase in the future long-term interest rates should exceed short-term interest rates (positive slope to the yield curve). True False 6. The primary role of bond covenants is to protect the borrower. True False 7. The farther a cash flow is in the future, the lower its present value today. True False 8. When a bond's YTM decreases its price will rise. True False