1. A callable bond has less reinvestment risk and more price appreciation potential than a similar but option-free bond. This statement is most likely
a. Incorrect with respect to price appreciation potential but correct with respect to reinvestment risk
b. Incorrect with respect to reinvestment risk but correct with respect to price appreciation potential
c. Incorrect with respect to both reinvestment risk and price appreciation potential
d. Correct with respect to both
2. A U.S. Treasury note with exactly 4 years maturity can most likely be broken into
a. Four Treasury STRIPS
b. None, only Treasury Bonds can be converted to STRIPS
c. Nine Treasury STRIPS
d. Eight Treasury STRIPS
e. Five Treasury STRIPS