The present value of an expected future payment ________ as the interest rate increases.
A. falls
B. rises
C. is constant
D. is unaffected
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If a security pays $55 in one year and $133 in three years, its present value is $150 if the interest rate is
A. 5 percent.
B. 10 percent.
C. 12.5 percent.
D. 15 percent.
A credit market instrument that pays the owner a fixed coupon payment every year until the maturity date and then repays the face value is called a
A. simple loan.
B. fixed-payment loan.
C. coupon bond.
D. discount bond.
Ifasecuritypays$105nextyearand$110theyearafterthat,whatisitsyieldtomaturityifitsellsfor$200?
A. 4percent
B. 5percent
C. 6percent
D. 10percent
Asecuritythatpays$52.50inoneyearand$110.25intwoyears,withaninterestrateof5percent,hasapresentvalueof
A. $150.
B. $162.50.
C. $200.
D. $300.