1) Choose the best multiple choice option:

Adding a call feature to a bond would ________ the yield required by investors.Adding a call feature to a bond would _____the duration and convexity of the bond

a) decrease;decrease

b)decrease; increase

c) Increase; increase

d) increase; decrease

2) Choose the best multiple choice option:

When interest rates rise, the duration of a 30-year bond selling at a discount:

a)decreases

b)increases

c)remains the same

d)increases at first, then declines

e) none of the above