1. What is the relationship between the price of a financial asset and the return that investors require on that asset, holding other factors constant?
2. Define the following terms commonly used in bond valuation:
(a) par value,
(b) maturity date,
(c) coupon,
(d) coupon rate,
(e) coupon yield,
(f) yield to maturity (YTM), and
(g) yield curve.
3. Under what circumstances will a bond's coupon rate exceed its coupon yield? Explain in economic terms why this occurs.