In a self-amortizing loan 17 18 1) The payment increases each period until the loan is paid off 20 21 > 2) Interest in each payment decreases until the loan is paid off 23 24 3) Principal repayment in each payment decreases until the loan is paid off ! 4) None of the above is true Your are holding a 10 year AAA rated corporate bond. When the market level of interest rates declines, what happens to the market value of your bond? 17 18 20 21 1) The market value of the bond increases. 2) The market value of the bond stays the same since its interest rate is fixed. 23 24 3) The market value of the bond decreases. 4) It depends on the bond's interest rate. Extremely high interest rates in the late 1970's and early 1980's were primarily due to 1) High default risk 2) Few opportunities for investment 3) The yield curve 4) High inflation On your fortieth birthday, you invest $50,000 and expect to receive an 8% annual return on your investment. Which of the following will tell you how much you will have when on your 65th birthday/ 1) The present value of single amount 2) The present value of an annuity 3) The future value of a single amount 4) The future value of an annuity