Unformatted text preview: _' 0. Which of the follouing bat illustrates the problan imposed by capital rationing?
Accepting projects with the highest NPVs ﬁrst . Accepting projects with the highest [RRs ﬁrst . Bypassing projects that have positive N?Vs . Bypassing projects that have poﬁtive IRRS ,Part II. Problem (2.5 points)
at will be the monthly payment ifyou take out a $125,000 thirty-year mortgage at an interest rate (APR) of 6%? How much of the ﬁrst payment is interest, and how much is amortization? Part III. Question (2.5 points) .
15-year Treasury bond is issued with face value Of $1,000, paying interest of $40 per year. If market yields tease shortly after the T-bond is issued, what happens to the bond’s (a) coupon rate? (b) price? (c) yield to
aturity? (d) current yield? Explain. ...
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- Spring '10