A $10-$year bond pays no interest for three years, then pays $$229\mathrm{.}25,$ followed by payments of

$$35$ semiannually for seven years, and an additional $$1,000$ at maturity. This bond is a:

A$.$ step$-$up bond.

B$.$ zero$-$coupon bond.

C$.$ deferred$-$coupon bond.

Which of the following statements is most accurate with regard to floating$-$rate issues that

have caps and floors?

A$.$ A cap is an advantage to the bondholder, while a floor is an advantage to the issuer.

B$.$ A floor is an advantage to the bondholder, while a cap is an advantage to the issuer.

C$.$ A floor is an advantage to both the issuer and the bondholder, while a cap is a

disadvantage to both the issuer and the bondholder.

Suppose a bond's price is expected to increase by $5\%$ if its market discount rate decreases by

$100$ basis points. If the bond's market discount rate increases by $100$ basis points, the bond price

is most likely to change by:

A$.5\%$

B$.$ less than $5\%$

C$.$ more than $5\%$