Question: Please answer all 6)The ________ interest rate more accurately reflects the true cost of borrowing. A) nominal B) real C) discount D) market 7) If

Please answer all

6)The ________ interest rate more accurately reflects the true cost of borrowing.

A) nominal

B) real

C) discount

D) market

7) If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is

A) $650.

B) $1,300.

C) $130.

D) $13.

8) An $8,000 coupon bond with a $400 coupon payment every year has a coupon rate of

A) 5 percent.

B) 8 percent.

C) 10 percent.

D) 40 percent.

9) When I purchase a 10 percent coupon bond, I calculate a yield to maturity of 8 percent. If I hold this bond to maturity, then my return on this asset is

A) 10 percent.

B) 8 percent.

C) 12 percent.

D) there is not enough information to determine the return.

10) The interest rate that equates the present value of payments received from a debt instrument with its value today is the

A) simple interest rate.

B) current yield.

C) yield to maturity.

D) real interest rate.

11) If the amount payable in two years is $2420 for a simple loan at 10 percent interest, the loan amount is

A) $1000.

B) $1210.

C) $2000.

D) $2200.

12) For a 3-year simple loan of $10,000 at 10 percent, the amount to be repaid is

A) $10,030.

B) $10,300.

C) $13,000.

D) $13,310.

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