1. Bond A is similar to Bond B in all aspects, except that Bond B has a higher coupon rate than Bond A.
If the yield on both bonds increases by 1%, you expect that
a. Bond B will appreciate in price less than Bond A
b. Bond B will depreciate in price less than Bond A
c. Bond B will appreciate in price more than Bond A
d. Bond B will depreciate in price more than Bond A
2. What is the holding period return on an investment over 3 years, if in the first year the return was 5.2%, the second year it was -10% and in the third year the return was 151.3%?
a. 237.93 percent
b. 227.93 percent
c. -190.80 percent
d. 137.93 percent