1. Consider a five year bond with a 10% coupon that is presently trading at a yield to maturity of 8%. If market rates do not change, one year from now the price of this bond _____________.
   1. Will be higher
   2. Will be lower
   3. Will be the same
   4. Cannot be determined from the information given

2. A bonds sensitivity to interest rate changes _____________ at a(n) _______________ rate as maturity lengthens.
   1. increases; decreasing
   2. decreases; decreasing
   3. increases, increasing
   4. decreases, decreasing