1) The yield spread of a particular bond equals

		the difference between the nominal return and the real return.
		The difference between the market rate and the coupon rate.
		the difference between the present value of the principal and the present value of the coupon payments.
		the difference in yield to maturity between a corporate bond and a treasury bond at roughly the same maturity.

2) You are considering the purchase of a 20-year bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000 and it makes semiannual interest payments. If you rquire an 8.5% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

		$1,105.69
		$1,133.34
		$1,161.67
		$1,190.71

3) If the real return of a bond is 5% and the inflation rate is 3%, what is the nominal return of the bond?

		2%
		8%
		15%
		5%

4) You are considering investing in a bond. Your financial advisor presents you with two bonds with the same maturity. One has a bond rating of AA, the other has a rating of CCC. Which bond would you expect to have the highest coupon rate?

		Since both bonds have the same maturity, the will have the same coupon rate.
		Not enough information is given to make a determination.
		The bond with the CCC rating.
		The bond with the AA rating.