Bonds traded between coupon dates are often quoted as:

A. Full price.

B. Flat price.

C. Dirty price.

D. None of the above.

Which of the following is true about convexity effect?

A. Prices rise more when rate decreases than prices drop when rate increases

B. Prices rise less when rate decreases than prices drop when rate increases

C. When rate increases or decreases by the same amount, prices drop or rise by the same amount.

D. None of the above

Bondholder 1 sold the bond at t = 1 for $89.85, Bondholder 2 sold the bond t = 2 for $93.02, Bondholder 3 sold the bond at t = 3 for $95.34. Which bondholder(s) made a capital gain/loss?