1.) ______ is the amount which will be repaid on the maturity date when the bond ends.

Coupon

Yield to Maturity

Rate of Return

Face (or Par) value

2.) The risk that refers to the possibility of future cash payments, which bondholders are entitled, be worth less in real terms

		Default risk
		Inflation risk
		Systematic risk
		Unsystematic risk

3.) A major disadvantage of using the Payback Method is:

		Difficult to calculate.
		Does not account for the time value of money.
		It looks at long-term cash flows rather than short-term cash flows.
		It requires the use of complex formulas.