1. U. S. Treasury bonds:
A) Are highly illiquid.
B) Are quoted at the dirty price.
C) Are quoted as a percentage of par.
D) Must be held until maturity.
E) Pay interest that is federally tax-exempt.
2. Which of the following combinations is ensured to decrease the interest rate sensitivity of a bond?
A. Increase in the time to maturity and a decrease in the coupon rate
B. Decrease in the time to maturity and an increase in the coupon rate
C. Increase in both the time to maturity and the coupon rate
D. Decrease in both the time to maturity and the coupon rate