Select at least one of the following and respond:

1. "Given the recent uncertainty about future interest rates, investors are fleeing from zero-coupon bonds."

2. "Johnson Insurance Company invests heavily in bonds, and its stock price increased substantially today in response to the Fed's signal that it plans to reduce interest rates."

3. "Bond markets declined when the Treasury flooded the market with its new bond offering."

4. "If interest rates continue to decline, then interest-only CMOs will take a hit."

5. "Estimating the proper value of CMOs is like estimating the proper value of a baseball player; the proper value is much easier to assess five years later."

6. "When purchasing principal-only (PO) CMOs, be ready for a bumpy ride."

7. "I'm thinking about purchasing some bonds to hold as an investment for my kid's college fund. Should I buy them now, or wait a while?"

8. "I'm thinking about purchasing a house with a mortgage. Should I wait a while, or go ahead? How many years should I take it out for? What features should I try to get/avoid?"