4. Why do investors like convexity? 5. Convexity - with an increase in time to maturity. a. decreases b. is unchanged C. increases 6. List two of the four reasons provided in class as to why bond index funds use a cellular approach rather than buying all of the bonds in an index. 7. As described in class and in your bond immunization assignment, what is the purpose of bond immunization? 8. If you expect interest rates to increase in the near future, should you choose to invest in short duration or long duration bonds today? 9. Looking for spreads between bond classes that aren't explained by risk differences and swapping bonds between classes to produce profits when yields are corrected is known as a(n): a. Substitution Swap b. Intermarket Spread Swap C. Rate Anticipation Swap d. Pure Yield Pickup Swap