1. What is the default risk premium for a CCC rated bond?
   1. 2.52%
   2. None of the above
   3. 3.42%
   4. 4.82%
   5. 9.00%
2. What is the maturity risk premium of a 20 year bond?
   1. 4.50%
   2. 3.42%
   3. 3.96%
   4. 7.92%
   5. None of the above
3. What should be the price of a 3 year BB bond that pays a semi-annual coupon of 4.4%?
   1. None of the above
   2. $876.88
   3. $936.06
   4. $938.40
   5. $912.44
4. What should the coupon rate be, if a company wants to issue 10 year semi-annual bonds. The company is CCC rated.
   1. 8.18%
   2. 12.51%
   3. None of the above
   4. 9.5%
   5. 6.26%
5. A company has issued 5 year BB bonds that pay a semi-annual coupon of 4.4% the company hits financial difficulty and the bonds are downgraded to CCC. What was the change in the price of the bond?
   1. None of the above
   2. The bond fell in price by $27.19
   3. The bond rose in price by $22.50
   4. The bond fell in price by $78.04
   5. The bond fell in price by $44.20

SecurityTreasuryTreasuryTreasuryTreasuryTreasuryCorp1Corp2Corp3Corp4Rating3510ABBAACCCYearsMaturity1$1,000$1,000$1,00020510203FaceValue$1,0002.00%4.40%7.80%$1,000$1,000$1,000$1,000$1,000CouponRate0.00%$939.06$932.42$1,007.127.00%8.10%5.00%8.20%4.50%MarketPrice$966.66$908.25$1,000.00$678.00$972.22$884.00