1. The following are two statements About a callable bond:

Statement 1: "The borrower of the callable bond has the right to repurchase the bond at a specific price."

Statement 2: "A callable bond has lower interest rate risk compared to a similar option-free bond due to the existence of the embedded call option."

A. Both statements are correct.

B. Exactly one of the statements is correct.

C. None of the statements is correct.

2. Series of zero-coupon bond for a full range of maturities is:

A. The spot curve.

B. The par curve.

C. The forward curve.

Please only attempt if you can solve the question with a proper explanation. Please do not copy from Chegg.