1. Consider two default-risk free securities issued by the same issuer and trading in a perfect capital market (e.g., no taxes, transactions costs, or arbitrage opportunities):

• Security A is a coupon bond, with a 2-year maturity, 4% coupon rate, and face value of $100
• Security B is a coupon bond, with a 2-year maturity, 4% coupon rate, and face value of $1,000

Evaluate the following statement: "Securities A and B have the same yield-to-maturity"

- True

- False

2. Consider the following statement: "Inverted yield curves typically precede economic booms."

- True

- False