1. The U.S. Federal Reserve suddenly raises interest rates. Which of the following statements are true, all else equal? [I] The price of the average bond is likely to go up. [II] The YTM of the average bond is likely to go up. [III] The absolute price difference between a long-maturity zero-coupon bond and a short-maturity zero-coupon bond is likely to go up.

   		I only
   		I and II
   		I, II and III
   		II and III
   		III only

All else equal, bond prices are more sensitive to interest rate with __________. [I] higher coupon rates [II] longer maturity [III] lower YTM

1. 		I only
   		I and II
   		I, II and III
   		II and III
   		III only