Question $1$

$6$ pts

When the coupon rate of a bond is higher than its yield to maturity, the bond must be selling at

a discount

the answer depends on how much the remaining coupon payments are

par

a premium

Question $2$

$6$ pts

With regards to adverse selection and moral hazard problems:

The former takes place prior to a contract, whereas the latter takes place after a contract.

The former is the result of a top$-$down conflict, whereas the latter is due to a bottom$-$up conflict in an organization.

The former is the result of a bottom$-$up conflict, whereas the latter is due to a top$-$down conflict in an organization.

The former takes place after a contract, whereas the latter takes place prior to a contract.