True or False

5. Bond investors prefer bonds with positive rather than negative convexity.

6. The term structure of interest rates defines the relation between bond maturity and bond yield to maturity.

7. A downward sloping yield curve is generally a positive sign of future economic prospects.

8. Nominal interest rates tend to increase when the economy expands.

9. A BB-rated bond would be considered investment grade.

10. A pension fund would probably prefer a municipal security with a yield of 2.5% to an equivalent corporate bond with a yield of 3%.