1-When the market yield is lower than a bonds stated coupon rate, the bond is likely to:

A-Sell at a premium.

B-Sell either at a discount or a premium, depending on how many coupon payments are left until the bond matures.

C-Sell at par, since the market yield has no affect on a bonds market price.

D-Sell at a discount.

2-The concave shape of the bond price-yield curve shows: I) For a given change in interest rates, bond prices will increase more when rates decrease than they will decrease when rates increase. II) The curve is steeper for higher interest rates. III) The curve is always downward sloping.

A)I is incorrect, II, III are correct.

B)I and II are correct, III is incorrect.

C)I, II and III are correct.

D)I, III are correct, II is incorrect.