1. If you owe $1,200.00, which is the most advantageous way to pay it back assuming a 12% APR discount rate?

a. $100.00 monthly payments over the next twelve months

b. $300.00 quarterly payments over the next four quarters

c. $600.00 paid every six months over the next year

d. $1,200.00 paid after one year

2. When interest rates decrease, what happens to the bond prices of seasoned issues (reminder: the coupon rate is fixed at issue)?

a. the bond prices decrease

b. the bond prices increase

c. the bond prices are unaffected d. the bonds will be retired and re-issued at higher coupon rates

Answer rating: 100% (QA)

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