True $/$ False

$1.$

A bond's value will increase as interest rates rise over time.

$2.$

There is an inverse relationship between bond ratings and the required return on a bond. The required return is lowest for AAA rated bonds, and required returns increase as the ratings get lower $($worse$).$

$3.$

Although common stock represents a riskier investment to an individual than do bonds, in the sense of exposing the firm to the risk of bankruptcy, bonds represent a riskier method of financing to a corporation than does common stock.

$4.$

Regardless of the size of the coupon payment, the price of a bond moves in the opposite direction from interest rate movements. For example, if interest rates rise, bond prices fall.

$5.$

Because short$-$term interest rates are much more volatile than long$-$term rates, you would, in the real world, be subject to much more interest rate price risk if you purchased a $30-$day bond than if you bought a $30-$year bond.