Which of the following risks is more specific to fixed income securities but not to financial institutions?

A. Liquidity risk

B. Off-balance-sheet risk

C. Interest rate risk

D. Call risk

Which of the following risks is specific to financial institutions but not to fixed income securities?

A. Liquidity risk

B. Off-balance-sheet risk

C. Interest rate risk

D. Call risk

Based on the liquidity premium theory, the expected 1-year spot rate in the future should be the 1-year foward rate for long-term bonds.

A. Higher than

B. Lower than

C. Equal to

D. High or lower than, depending on the YTM

What will happen to a bond's price when its YTM increases? If its YTM continues to increase, what will eventually happen to the magnitude of the bond price change?

A. Its price will decrease, and the magnitude of decrease will get larger.

B. Its price will decrease, and the magnitude of decrease will get smaller.

C. Its price will increase, and the magnitude of increase will get smaller.

D. Its price will increase, and the magnitude of increase will get larger.