Multiple Choice Questoins (5 points each) 1. Which one is a key characteristic of the bond? a present value b. pure value c. perfect value d. par value 2. A bond is ... a a certificate that is a promise to pay money in the future b. None of the answers is correct c. a certificate that is a promise to borrow money from you in the future d. a certificate that is a promise to lend you money in the future 3. What's the present value of a perpetuity that pays $1,000 per year beginning 1 year from now, if the appropriate interest rate is 5%? a. 200,000 b. 100,000 c. 10,000 d. 20,000 4. If you deposit 200KD in the bank, which pays you annual 5% compounded monthly. How much will you have in 2 years? Select the closest answer. a 210 b. 248 c. 232 d. 226 5. What is the present value of a security that will pay $1000 in 3 years if it pays 10% annually? Select the closest answer a. 751 b. 667 c. 897 d. 800 6. You just won the lottery. To receive your winnings, you must select ONE of the two following choices You can receive $1,000,000 a year at the end of each of the next 30 years. You can receive a one-time payment of $15,000,000 today. Assume that the current interest rate is 6%. Which option is most valuable? a. both are equally good b. can't be determined c. first option is better d. second option is better