1297354874833_Eco412_quiz2_fall10

1297354874833_Eco412_quiz2_fall10 - Quiz 2 ECO412 Name...

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Quiz 2: ECO412, September 23, 2010 Name ____________________________ Multiple Choice Questions: 1 point each. Read each question carefully. Always select the best answer, especially if more than one appears to be correct. _____1. The future value of a payment is related to the present value by a. PV = (1+i) n / FV n . b. FV n = PV / (1+i). c. PV = FV n + PV(1+i) n . * d. FV n = PV * (1+i) n . e. both b and d. _____2. A coupon bond with a face value of $10,000 is for sale that promises 3 annual coupon payments of $1,000 each. If the interest rate is 7%, what is the most you would be willing to pay today for the bond? a. $13,000.00 b. $12,149.53 * c. $10,787.29 d. $15,690.37 _____3. Suppose that $1,000 is placed in an interest-bearing account and will be left there for 5 years. The interest rate equals i. How much money will be in the account at the end of this time period? a. $1000 + 5i b. $1000(1+5i) * c. $1000(1+i) 5 d. $1000 / (1+i) 5 _____4. If the annual interest rate is 6%, the corresponding monthly interest rate is:
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This note was uploaded on 09/07/2011 for the course ECO 412 taught by Professor Staff during the Spring '05 term at Kentucky.

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1297354874833_Eco412_quiz2_fall10 - Quiz 2 ECO412 Name...

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