1. For plain vanilla bonds (e.g. bonds with no embedded options), price and yield are ___________ related, and the graphical relationship is _______________.
a. positive; linear
b. inverse; convex
c. positive; convex
d. inverse; concave
2. Which of the following is the best example of a negative covenant?
a. The firm cannot issue additional long-term debt
b. The company must furnish audited financial statements
c. The company must maintain its working capital at a predetermined level
d. The company must maintain collateral in good condition