1. You have a 25-year maturity, 10.1% coupon, 10.1% yield bond with a duration of 10 years and a convexity of 135.6. If the interest rate were to fall 126 basis points, your predicted new price for the bond (including convexity) is _________.
a. $1,114.40
b. $1,103.64
c. $1,090.83
d. $1,125.20
2. ____________ is not considered capital market securities.
A. Repurchase agreements
B. Municipal bonds
C. Corporate bonds.
D. Equity securities
E. Mortgages