1A bond has a coupon rate of 9% and a yield to maturity of 8%. The bond is selling

Select one:

a.

none of the given choices.

b.

below par value.

c.

at par value.

d.

above par value.

2Based on expectations theory, when investors believe that short-term interest rates will be lower in the future than they are today, then the term structure of interest rates should be:

Select one:

a.

upward sloping

b.

flat

c.

volatile

d.

downward sloping