1. The risk that interest rate will decrease and thus hurt bondholder is called _______________.

		Unsystematic Risk
		Default Risk
		Interest Rate Risk
		Reinvestment Rate Risk
		Portfolio Risk

2. Assume that interest rates on 15-year noncallable Treasury and corporate bonds with different ratings are as follows:

T-bond = 7.72%	A = 9.64%
AAA = 8.72%	BBB = 10.18%

The differences in rates among these issues were most probably caused primarily by:

		Tax effects.
		Default risk differences.
		Maturity risk differences.
		Inflation differences.
		Real risk-free rate differences.