Question 13.13. (I) The coupon rate is the rate of interest that the issuer of the bond must pay. (II) The coupon rate on old bonds fluctuates with market interest rates so they will remain attractive to investors. (Points : 3)

(I) is true; (II) is false (I) is false; (II) is true Both statements are true Both statements are false

Question 14.14. Governments do not issue stocks because: (Points : 3)

they cannot sell ownership claims they cannot sell debt claims the Constitution expressly prohibits it they cannot compete effectively with corporations relative to profits