Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly.

a. The present discounted value of a stream of returns can be calculated in real or nominal terms.

b. The higher the one-year interest rate, the lower the present discounted value of a payment next year.

c. One-year interest rates are normally expected to be constant over time.

d. Bonds are a claim to a sequence of constant payments over a number of years.

e. Stocks are a claim to a sequence of dividend payments over a number of years.

f. House prices are a claim to a sequence of expected future rents over a number of years.

g. The yield curve normally slopes up.

h. All assets held for one year should have the same expected rate of return.

i. In a bubble, the value of the asset is the expected present value of its future returns.

j. The overall real value of the stock market does not fluctuate very much over a year.

k. Indexed bonds protect the holder against unexpected inflation.