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Unformatted text preview: A)12 percent. B) 5 percent. C)12.5 percent. D) 8 percent. 5)If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is A)$1,300. B)$130. C)$13. D)$650. E)None of the above. 6)A loan that requires the borrower to make the same payment every period until the maturity date is called a A)discount loan. B)simple loan. C)same-payment loan. D)fixed-payment loan. E)none of the above. 7)The interest rate that equates the present value of the cash flow received from a debt instrument with its market price today is the A)simple interest rate. B) real interest rate. C)yield to maturity. D) discount rate. ESSAY. Write your answer in the space provided or on a separate sheet of paper. 8)Describe how Treasury Inflation Protection Securities (TIPS) work and how they help policymakers estimate expected inflation. 9)Why are long-term bonds more risky than short-term bonds? 1)D 2)D 3)C 4)D 5)D 6)D 7)C 8) 9)...
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- Spring '08
- coupon bonds, simple loan