1 A sinking fund provision will:

a) increase the required yield to maturity.

b) reduce the require yield to maturity.

c) reduce the price of the bond.

d) reduce the payment of the bond.

e) reduce the credit rating of the bond.

2 An unexpected increase in market interest rates will cause: I. bond prices to increase. II. bond prices to decrease. III. yields to maturity to increase. IV. yields to maturity to decrease.

a) I only

b) I and III only

c) I and IV only

d) II and III only

e) II and IV only