1. With a downward-sloping yield curve, the pay-fixed party will _____ money on the first payment date, and with an upward-sloping yield curve, the pay-fixed party will _____ money on the first payment date.

a) receive; pay

b) pay; pay

c) receive; receive

d) pay; receive

e) There is not enough information to answer this question.

2. Suppose you purchased 200 shares of AMP stock at the beginning of year 1 and sold 100 shares at the end of year 1. You sold the remaining 100 shares at the end of year 2.

The price of AMP stock was $50 at the beginning of year 1, $55 at the end of year 1, and $65 at the end of year 2. No dividends were paid on AMP stock over this period.

In this case, your dollar-weighted return on the stock will be __________ your time-weighted return on the stock.

a) More information is necessary to answer this question

b) higher than

c) the same as

d) less than

e) exactly proportional to