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.