Question 27 3 pts Duration measures O The change in maturity when interest rates change The number of years until maturity The change in cash flows to a change in the yield to maturity O The change in price of a bond when the yield to maturity changes Question 28 3 pt Calculate the yield to maturity of a two-year, zero-coupon bond with a par value of $1000 and a market price of $900. (You do not need to use a financial calculator). O 0% O 11.11% $100 5.41% If the yield curve is inverted, Expectations Theory suggests: Absolutely nothing because the theory suggestions expectations are irrelevant The one year rate in five years will be higher than the one year rate today Absolutely nothing because an inverted yield curve never occurs The one year rate in five years will be lower that the one year rate today Question 30 2 pts Years to Maturity 1 2 3 5 7 10 20 30 Yield To Maturity 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% The yield curve now is: Normal Impossible because long term yields are always lower than short-term yields Inverted Question 31 3 pts 1 2 3 5 7 10 20 30 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.0096 Years to Maturity Yield To Maturity (Today) Yield To Maturity in 1 year (11/15/2022) 3.00% 4.00% 4.50% 5.00% 5.50% 6.00% 6.00% 6.00% Based on this chart, which of the following strategy offers the most gain O Buying the 30-year bond only O Holding your money in cash O Buying the 1-year bond Buying the 5-year bond only