The subject areas for the discussion questions in the exam are as follows:
1. relationship between bond prices and changing market rates.
2. relationship between coupon rates and yield rates.
3. relationship between book value of bonds and market value of bonds.
4. Why would someone buy a municipal bond with a lower coupon rate than a corporate bond? IN other words, why do higher income investors prefer municipal bonds in their portfolio?
5. Explain EQUITY MULTIPLIER AND WHY COMMERCIAL BANKS HAVE THE HIGHEST EM?
These subject were covered explicitly in class and are in your text book and discussion means discussion, two or three sentences will not suffice.