8. The duration of a bond normally increases with an increase in A. term to maturity. B. yield to maturity. C. coupon rate. D. All of the options are correct 9. Which of the following are false about the interest-rate sensitivity of bonds? D Bond prices and yields are inversely related II) Prices of long-term bonds tend to be more sensitive to interest-rate changes than prices of short-term bonds. III) Interest-rate risk is correlated with the bond's coupon rate IV) The sensitivity of a bond's price to a change in its yield to maturity is inversely related to the yield to maturity at which the bond is currently selling. A. I C. I. II, and IV D. II, III, and IV 10. Which of the following bonds has the longest duration? A. A 12-year maturity, 0% coupon bond. B. A 12-year maturity, 8% coupon bond. C. A 4-year maturity, 8% coupon bond. D. A 4-year maturity, 0% coupon bond. 11. According to Roll, the only testable hypothesis associated with the CAPM is A. the number of ex post mean variance efficient portfolios. B. the exact composition of the market portfolio. C. whether the market portfolio is mean variance efficient D. the SML relationship