D) I, II and II 4. The term structure of interest rates is upward sloping for all bond types. A certain AAA rated non-callable 10 year corporate bond has been issued at a 6.15% promised yield. Which one of the following bonds probably has a higher promised yield A. A similar quality municipal bond. B. A non-callable AAA rated corporate bond with a 5 year maturity. C.A callable AAA rated corporate bond with a 15 year maturity. D. A non-callable AAA rated convertible corporate bond with a 10 year maturity. E. All of the above would have a higher promised yield 5. An increase in the rate of expected inflation will A. increase demand for money and increase supply of money B. increase demand for money and decrease supply of money C. decrease demand for money and decrease supply of money D. decrease demand for money and increase supply of money 6. All but one of the following affects the supply of loanable funds? A) the level of income. B) the investment opportunities in the economy. C) the savings rate. D) Federal Reserve monetary policy actions. 7. The issuer is more likely to exercise a call option A) interest rates are expected to increase. B) interest rates are expected to decrease. C) the security's price is expected to increase. D) the security's rating is upgraded by Moody's. on a bond when