True and False:

1. If a bond is selling at a premium, that is at above $1,000, it must have a negative capital gains yield.

2. Bond prices and yield are directly related. When a bond price rises, the yield will rise.

3. An investor in a common stock requires a higher return than a investor in a bond for the same company.

4. The beta is a measure of risk. The lower the risk the lower the beta.

5. Investors in high tax brackets are more likely to own municipal bonds than investors in low tax brackets.

6. A convertible bond is likely to be turned into common stock if the stock price rises more than expected.

7. A corporation issues a callable bond it may decide to call it its bond if interest rates rise by the call date.

8. A zero coupon bond does not pay interest to the bond owner.