1) Which of the following is one of Malkiel's theorems?

The lower the coupon rate on a bond, the more sensitive is its price to a change in interest rates

Bond prices move in the same direction with interest rates

For a given bond, the volatility of a bond is symmetrical, i.e., a decrease in interest rates raises bond prices by the same amount as a corresponding increase in interest rates lowers prices

The price sensitivity of any bond increases with its maturity, but the increase occurs at a increasing rate

2 ) Consider Bond XYZ, a 4% coupon 5-year bond with semi-annual payments. Which of the following is true?

Bond LMN, a 6% coupon 5-year bond with semi-annual payments will have a larger Macaulay Duration than Bond XYZ

Macaulay Duration for Bond XYZ will be less than 5

If interest rates increase then the Bond XYZ price will increase

Bond ABC, a 4% coupon 10-year bond with annual payments will have a smaller Macaulay Duration than Bond XYZ

3) Consider the financing of a $15,000 car with monthly payments for 3 years and an APR of 9%. What is the monthly payment?

$477.00

$454.06

$417.03

$416.67