Choose the answer below which most accurately describes the relationship between a U$.$S$.$ Treasury

security and risk.

A$)$ U$.$S$.$ Treasury securities are completely free of risk of all types, because of the full faith and credit of

the U$.$S$.$ government

B$)$ As interest rates fluctuate, the value of a U$.$S$.$ Treasury security will fluctuate. Accordingly, U$.$S$.$

Treasury securities are subject to interest rate risk. Further, long$-$term Treasury securities have

substantial interest rate risk.

$2.$ Which of the following bonds will have greater interest rate risk due to having lower coupons, all else

t h e s a m e $?$

A$)30$ year Treasury bond

B$)30$ year BB corporate bond