Which bond would have the most default risk?

	BB+ Company 4
	C- Company 1

	CCC Company 2
	A- Company 3

Which of the following is one of Malkiel's theorems?

	For a given bond, the volatility of a bond is symmetrical, i.e., a decrease in interest rates raises bond prices by the same amount as a corresponding increase in interest rates lowers prices
	Bond prices move inversely with interest rates

	The price sensitivity of any bond increases with its maturity, but the increase occurs at a increasing rate
	The lower the coupon rate on a bond, the less sensitive is its price to a change in interest rates

Consider Bond XYZ, a 4% coupon 5-year bond with annual payments. Which of the following is true?

	Macaulay Duration for Bond XYZ will be less than 5
	Bond ABC, a 8% coupon 10-year bond with semi-annual payments will have a smaller Macaulay Duration than Bond XYZ

	If interest rates increase then the Bond XYZ price will increase
	Bond LMN, a 6% coupon 5-year bond with semi-annual payments will have a larger Macaulay Duration than Bond XYZ

if modified duration = 4 and interest rates decrease by 0.5% then the bond price will...

	Decrease by 8%
	Increase by 8%

	Decrase by 2%
	Increase by 2%

Which of the following is true?

	If you can beat the market using techical analysis then the market is semi-strong form efficient
	If the market is weak form efficient then the market is also semi-strong form efficient

	If the market is strong form efficient then the market is also semi-strong form efficient
	If you can beat the market with fundamental analsysis then the market is strong form efficient

Which of the following is true if the market is efficient?

	Stock prices should adjust slowly to new information
	Stock prices will underreact to new information; but, adjust to a new equibrium within 3 business days

	Stock prices will overreact to new information and adjust to a new equilibrium within 7 days
	Stock prices should react quickly and accurately to new information