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63. Which of the following describes the relationship between realized yield and the yield to maturity calculated at maturity: a. The yield to maturity will be the same as the realized yield if you purchased a zero-coupon bond b. The yield to maturity will always be the same as the realized yield for any bond c. The yield to maturity will always be higher than the realized yield d. The yield to maturity will always be lower than the realized yield 64. Duration measures a. The time until the bond matures b. The sensitivity of cash flows to a change in the yield to maturity c. The sensitivity of price to a change in the yield to maturity d. The change in maturity when interest rates change 65. If a bond has a duration of 7 years: a. It will mature in 7 years b. If the YTM falls by 1 percent, the price falls about 7 percent c. If the YTM falls by 1 percent, the price rises about 7 percent d. None of the above because a bond can never have a duration of 7 years 66. Consider two bonds: A 30 year zero coupon treasury and a 30 year 8% General Motors bond. Which of the following is true a. The General Motors bond should have a higher default premium than the Treasury b. The General Motors should have a higher duration than the Treasury c. Both A & B d. None of the above 67. If you own a mortgage bond and you increase the pre-payment assumption: a. The duration of the bond will likely increase b. The reinvestment risk of the bond will likely increase c. Nothing will change because you have already purchased the bond d. The default risk of the bond would increase