1. The three traditional strategies for immunizing bond portfolios from interest rate risk include the ladder strategy, the barbell strategy, and the bullet strategy.

True

False

2. Which of the following statements regarding money market securities is(are) CORRECT?

a. Money markets include short-term, highly liquid, relatively low-risk debt instruments sold by governments, financial institutions, and corporations to investors.

b. Investors may invest directly in money market securities.

c. Treasury bills are an example of a money market security and are used as a benchmark asset because of their risk-free nature.

d. All of these

3. All of the following statements regarding bond characteristics are correct EXCEPt?

a. the typical bond matures (terminates) on a specified date and is technically known as a term bond

b. the lower the price paid for a coupon bond, the lower the effective return

c. typically, coupon bonds pay interest semiannually

d. a bond sold with no coupons, at a discount, and redeemed for face value at maturity is called a zero-coupon bond