1. Which of the following statements is true about bank credit cards like VISA and MasterCard?

They are an excellent source of emergency funds for unexpected expenses.

Their interest rate is generally lower than a loan at a credit union.

Like home equity loans, the interest paid on credit cards is tax deductible.

Their interest rate is lower than home equity lines of credit.

2. If you purchase a bond that matures in 5 years but you may have to cash it in before that time, you are exposed to

A. liquidity risk.

B. default risk.

C. interest rate risk.

D. A and C are both correct.