Use the following statements to answer questions 39-40.

• Statement I: Some spread risk is captured in analyzing effective duration and convexity.
• Statement J: A put will reduce the effective duration of bond all else equal.
• Statement K: The credit term structure for highly rated securities tends to be either flat or slightly upward sloping.
• Statement L: The credit term structure for lower-rated securities is often steeper and credit spreads tighten with the expectations of stronger economic growth.

Which statement is correct?

1. A. Statement I B. Statement J C. Both statement I and J D. Neither statement