Question: 1. Holding maturity constant, a bonds duration is ___ when the coupon rate is lower. (a) lower. (b) higher. (c) the same. (d) slightly higher.

1. Holding maturity constant, a bonds duration is ___ when the coupon rate is lower. (a) lower. (b) higher. (c) the same. (d) slightly higher.

2. Immunization is accomplished by calculating the duration of the promised outflows and then investing in a portfolio of bonds that has a(n) ___ duration. (a)longer. (b) shorter. (c) identical. (d) slightly shorter. 3. management of a bond portfolio is based on the belief that the bond market is not perfectly efficient. (a) Passive. (b) Buy-and-Hold. (c) Dynamic. (d) Active.

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