1. If a bonds volatility is 10% and the interest rate goes down by 0.75% (points

1. If a bonds volatility is 10% and the interest rate goes down by 0.75% (points) then the price of the bond: a. Decreases by 10%b. Decreases by 7.5%c. Increases by 7.5%d. Increases by 0.75%2. If a bonds volatility is 5% and the interest rate changes by 0.5% (points) then the price of the bond: a. Changes by 5%b. Changes by 2.5 %c. Changes by 7.5%d. None of the above3. Volatility of a bond is given by: I) Duration/ (1+yield) II) Slope of the curve relating the bond price to the interest rate III) Yield to maturity a. I onlyb. II onlyc. III onlyd. I and II only4. The term structure of interest rates can be described as the: a. Relationship between the spot interest rates and the bond pricesb. Relationship between spot interest rates and stock pricesc. Relationship between spot interest rates and maturity of a bondd. None of the above