hmwk2 mc questions

hmwk2 mc questions - Homework 2 MC Questions MULTIPLE...

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Homework 2 MC Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The concept of ________ is based on the common - sense notion that a dollar paid to you in the future is less valuable to you than a dollar today. 1) _______ A) future value B) interest C) deflation D) present value 2) With an interest rate of 6 percent, the present value of \$100 next year is approximately 2) _______ A) \$106. B) \$100. C) \$94. D) \$92. 3) An increase in the time to the promised future payment ________ the present value of the payment. 3) _______ A) decreases B) is irrelevant to C) increases D) has no effect on 4) If the amount payable in two years is \$2420 for a simple loan at 10 percent interest, the loan amount is 4) _______ A) \$1000. B) \$1210. C) \$2000. D) \$2200. 5) A ________ pays the owner a fixed coupon payment every year until the maturity date, when the ________ value is repaid. 5) _______ A) coupon bond; discount B) coupon bond; face C) discount bond; discount D) discount bond; face 6) An \$8,000 face coupon bond with a \$400 coupon payment every year has a coupon rate of 6) _______ A) 5 percent. B) 8 percent. C) 10 percent. D) 40 percent. 7) Which of the following \$1,000 face - value securities has the lowest yield to maturity? 7) _______ A) A 15 percent coupon bond selling for \$1,000 B) A 15 percent coupon bond selling for \$900 C) A 5 percent coupon bond selling for \$1,000 D) A 10 percent coupon bond selling for \$1,000 8)

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This note was uploaded on 10/17/2009 for the course EC 370 taught by Professor Staff during the Spring '08 term at University of Oregon.

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hmwk2 mc questions - Homework 2 MC Questions MULTIPLE...

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