A long-term investor who searches for protection against rising consumer prices would most likely purchase a:

		a. U.S. Treasury bond
		b. Mortgage-backed security
		c. U.S. Treasury inflation protection security
		d. Equity shares in a financial institutio

Uncle Robbie, who does not have a margin account, bought a Treasury bond on the secondary market that has 10 years until maturity and a 2% coupon payment, paid semi-annually. Which of the following risks is he subject to?

		a. Financial risk
		b. Exchange rate risk
		c. Default risk
		d. Reinvestment rate risk

A commercial bank owns a portfolio of fixed income securities with a market value of $810 million. The bank is concerned about a spike in inflation during the coming month, citing a potential energy shortage. A surge in oil and natural gas price would place significant downward pressure on the value of the portfolio. The risk management tool most likely to help the bank is:

		a. Beta
		b. Standard deviation
		c. Value at risk
		d. Correlation coefficient