Question: 1.A bond with default risk will always have a positive risk premium 2. The fact that two bonds have the same term to maturity does

1.A bond with default risk will always have a positive risk premium

2. The fact that two bonds have the same term to maturity does not mean that they have the

same interest-rate

3. Even though a bond has a substantial initial interest rate, its return can turn out to be

negative if interest rates rise

4. The more the demand for saving in the market implies interest rates must rise to make

equilibrium

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