True False - Answer all 10 questions (total 15 points). Mark your answer on the Scan Tron as either True ("A") or False ("B"). 35. starting to invest early for retirement increases the benefits of compound interest Starting to in True False 36 The price sensitivity of a bond (how much it fluctuates in price) to a given change in interest rates is generally lower or less volatile -- when the bond's remaining time until maturity is longer. a. b. True False 37. "Junk bonds" are high-risk, high-yield debt instruments. They are often used to finance leveraged buyouts and mergers, and to provide financing to companies of questionable financial strength. b. True False 38. If a bank compounds the interest income that you earn on a savings account on a quarterly basis, the nominal rate will exceed the effective annual rate. b. True Bala False 39. The cash flows associated with equity investing are typically more difficult to forecast than the coupons earned on bonds, because common stocks have a residual claim against the income and assets of a company, versus the contractual obligation of payments for a bond. of paym Sainst the inoupons and equity in a b. True False 40 The total payment made each period on an amortized loan is constant, and it consists of some interest and some principal repayment. The closer we are to the end of the loan's life, the greater the percentage of the payment that will be a repayment of principal. a. True b. False Diversification will normally increase the riskiness of a portfolio of just five-to-ten different common stocks. True False