_10. A typical yield curve is upward sloping. It shows shorter term interest rates lower then long term rates. 11. What are the two types of risk a portfolio manager seeks to diversfy in a fixed income portfolio: 1. market risk 2. default risk 3. interest rate risk 4. purchasing power risk 1 and 2 1 and 3 2 and 4 2 and 3 _12. One way to diversify default risk is to buy multiple bonds from the same issuer but with different maturities. -13. Which of the following would be an example of a constraint imposed on a fixed-income portfolio: b. specifying the average maturity need for periodic income limiting the bond investments to a certain grade (ie: AA or better) all of the above -14. The expected return on a bond portfolio can be raised by choosing lower grade bonds, longer maturities, or both