Consider these statements:
1. Statement 1: Sovereign bonds are best described as secured obligations of a national government.
Statement 2: Over time (over several coupon periods), the full price of a bond will move in a sawtooth fashion, while the flat price of the bond will move much more smoothly.
Both statements are correct.
Both statements are not correct.
Only statement 1 is correct.
Only statement 2 is correct.
2. Statement 1: The legal contract that describes the form of a bond, the obligations of the issuer, and the rights of the bondholders is the bond's indenture.
Statement 2: The tenor of a bond is equal to its duration.
Both statements are correct.
Both statements are not correct.
Only statement 1 is correct.
Only statement 2 is correct.