Question 16 marks each, total 42 marks) Briefly explain with 1 or 2 sentences only (not more than 50 words) that whether you agree or disagree each of the following parts. (a) When I buy a flat with mortgage loan in Hong Kong, it is not possible for the loan interest rate to be lower than the prime rate. (b) If Peter purchased 10 units of Treasury Notes yesterday, and such financial product would be matured within a month, then this transaction is considered as a trade in the money market. (c) Bond A is a zero-coupon bond with face value of $10000, which would be matured in 10 years. Bond B is a coupon bond with 5% coupon rate and face value of $2000, which would be matured in 4 years. The reinvestment risk of bond A is larger than the reinvestment risk of bond B. (d) Investors may still buy a coupon bond if the bond price is greater than the face value. (e) Stock involves a fixed claim on the firm periodically. (f) To encourage corporate investment and expansion, Central Bank may conduct a monetary policy by increasing interest rate. (g) The price of a callable bond is in general higher than a (normal) coupon bond (without a call feature)