-Which of the following statements is true about the Term Structure of Interest Rates?

It predicts that increases in the default risk of a security will result in lower interest rates demanded for that security

It examines bonds with similar terms to maturity, but varying credit risk

It examines bonds with similar levels of credit risk, but varying terms to maturity

It graphs the credit spread between interest rates and risk free rates of return

None of the above

-Which of the following best characterizes coupon bonds?

Regular intervening payments based on the bond's face value and a final repayment of the face value

A single future cash flow sold at a discount, with the price converging to face value by maturity

The notional amount borrowed by governments

An investment with a price that always initially exceeds face value and slowly converges to face value through by maturity

A security that makes regular dividend payments through time