1) Consider a coupon bond

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1) Consider a coupon bond. If the bond price is higher than the par value, then the yield exceeds its coupon rate.

True

False

2)  All else equal, the interest rate of a bond and its duration are positively related.

True

False

3) Minco Ltd, a large mining company, provides a superannuation fund for its employees. The fund's manager says: ‘We know the mining industry well, so we feel comfortable investing most of the fund in a portfolio of mining company shares’. Advise Minco's employees on whether to endorse the fund's investment policy.