1.Company has a sinking fund provision requiring it to repurchased 2% of it's outstanding bonds back at the end of each year through the bond market. The bonds of company issued with a coupon rate of 8%. Current market rated on similar bonds at 6%. The company will repurchase their bonds in the market.

a. TRUE

b. FALSE

2. A $1000 par value bond has a 5% annual coupon rate and 25 years to maturity. Bonds of similar risk are offering coupon rates of 8%. What is the current price of the bond?

3. in an efficient market the only way to earn positive returns is to get lucky.

a. TRUE

b. FALSE