1. A ten-year annuity pays $100 each year. The market discounts it at a yield of 5%. Which of the following changes will cause its present value to increase? Choose two.

1. An increase in its maturity to eleven years.
2. An increase in yield to 6%.
3. An increase in cash flow to $110.

2. What is meant, in a fixed income context, by a bad day?

1. a day when interest rates went up
2. a day when bond prices rose
3. a day when bond prices fell
4. a day when banks are closed and, therefore, proceeds or interest/coupon payments cannot be received