15. Which of the following is CORRECT about the arbitrage-free price of a coupon bond? The sum arbitrage-free price of a coupon bond. The coupon of the present value of all cash flows (discounted at the required yield) is the A. B. C. The the present value of all cash flows (discounted at the spot rate of the bond's final term to maturity) is the arbitrage-free price of a coupon bond. of the present value of all cash flows (discounted each cash flow at the sum of sum spot rate associated with its maturity) is the arbitrage-free price of a corresponding coupon bond. Which of the following yield curves is the closest proxy for the Treasury Spot 16. Rate Curve? . Treasury Actives (On-the-run) Yield Curve B. Treasury OnOff-the-run Yield Curve c. Treasury Strip Yield Curve D. Treasury Inflation Protected Securities (TIPS) Yield Curve 17. Holding other factors constant, the interest-rate risk of a bond is higher when its A. term-to-maturity is lower B. coupon rate is higher. C. yield to maturity is lower 18. Interest Rate term structure is the relationship between yield and A. bond price B. par value C. maturity D. coupon rate