6) The higher the default risk on a bond, the higher the interest rate will be. A) True B) False 7) You have a bond that pays $18 per year in coupon payments. Which of the following would result in a decrease in the price of your bond? A) Coupon payments on newly-issued bonds fall to $15 per year. B) The likelihood that the firm issuing your bond will default on debt decreases. C) The price of a share of stock in the company rises. D) Coupon payments on newly-issued bonds rise to $22 per year. If a corporate bond with face value of $8,000 has an interest rate of 4 percent paid once a year for a term of 30 years, what is the total amount of coupon payments issued to the buyer? A) $320 B) $2,000 C) $8,000 D) $9,600 9) One of the most widely followed stock indexes in the United States is the S&P 500. This index represents A) the stock prices of 500 large U.S. firms based on market capitalization. B) the stock prices of the 500 most valuable firms worldwide. C) the stock prices of more than 4,000 U.S. firms. D) the stock prices of 30 large U.S. corporations. 10) Mutual funds are a good and relatively inexpensive way for individual investors to diversify. A) True B) False