True or false. No explanation is required. 9.On average, a coupon bond will incr

Solution: 9 FALSE 10 TRUE 11 FALSE 12 FALSE 13 FALSE 14 TRUE

ID: 2383172 • Letter: T

Question

True or false. No explanation is required.

9.On average, a coupon bond will increase in value as it approaches maturity.

10.A bond with a coupon rate higher than its yield is worth more than its par value.

11.Real interest rates are generally higher than nominal interest rates.

12.REITs pay almost no taxes.

13.If the S&P500 index had a positive return today, we would expect that a US investment grade bond index would also have a positive return today.

14.A floating rate mortgage generally has a higher interest rate than a fixed rate mortgage.

15.The Fisher effect implies that the 10-year government bond rate is roughly inflation plus a constant.

Solution:

9 FALSE 10 TRUE 11 FALSE 12 FALSE 13 FALSE 14 TRUE

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