6.Bonds rate BBB or Baa or above are considered investment grade bonds whereas those lower rated bonds are classified as speculative grade, high yield, or junk bonds. Defaults on high-grade bonds - the reason for the rating - are not common as evidenced by our in-class discussion.

True

False

7.While oftentimes referred to as risk-free, default-free bonds such as US Treasury issues are nonetheless subject to interest rate and inflation rate risk.

True

False

8.Owing to the recent actions by the Federal Reserve in 2020, the current US government yield curve is inverted. Yield curves can be used to extract market expectations

True

False

9. Price changes should be random and unpredictable and are the result of investors competing to discover relevant information on which to buy or sell securities before the rest of the market becomes aware of that information.

True

False

10.Bond default risk is usually referred to as credit risk and is orchestrated under the heading of "credit analysis." Merrill Lynch, Morgan Stanley, and Goldman Sachs are some of the largest providers of quality ratings on bond issues.

True

False