I’m stuck on a Business question and need an explanation.

Important General Instructions for Reporting Numerical Answers:

– Do not round intermediate calculations.

– Report your answers to the number of decimal places requested.

– Unless otherwise instructed, solve problems in the given units. IE: if given units are in $K, complete your computations in these units and, as applicable, report your answer in these units (without writing “$” or “K”).

– Do not report any numerical answer as a percent. IE: for example, write

0.324 instead of 32.4%.

– Report negative numbers with a leading minus sign, like this (for example):

-23.451

Not like this: (23.451).

– Note that Canvas removes trailing insignificant figures. If you type, for example, 41.350, Canvas will remove the last decimal place and record your answer as 41.35 This is fine because 41.35 = 41.350.

– Assume time is measured in years unless otherwise stated.

Q1:

The Treasury issues a two-year bond today and a ten-year bond today. For which one will it pay a higher interest rate?

a. This question cannot be answered without the relevant auction data
b. The ten-year bond
c. The interest rate is equal because both bonds are issued on the same day.
d. The two-year bond

Q2:

What are four risks of Treasury Securities outlined in CH09?

A. Price shock
B. Recession
C. Liquidity
D. Inflation
E. Interest Rate
F. False Value Investing
G. Stock Market
H. Default
I. Duration

Q3:

Your investment mission is “invest in debt securities of the major U.S. airlines.” Which is the best Opportunity Investment for you?

A. A bond of Delta airlines.
B. Fidelity’s Targeted Airline Opportunities ETF, which invests in the stocks, bonds and equity of several boutique U.S. airlines.
C. Blackrock’s Low Volatility Airline ETF, which invests in the equity of America’s largest, most stable airlines.
D. Pimco’s Conservative Airline ETF, which invests in the bonds and bank loans of many U.S. airlines.