Question: Question 1 1 point possible (graded) Suppose there is no uncertainty. There is an investment plan in which you pay $100 in t and receive

Question 1

1 point possible (graded)

Suppose there is no uncertainty. There is an investment plan in which you pay $100 in t and receive $5 in t+1 and $105 in t+2. Which of the following should the yield to maturity, i, satisfy?

A.

B.

C.

D.

E.

Question 2

1 point possible (graded)

Depending on the market convention, yields can be quoted on a yield (Y) or discount (D) basis. For the same instrument, which of the following is true?

(Hint: if you don't know the answer immediately, think of an example of a simple one-period zero coupon bond)

A.Y is always greater

B.D is always greater

C.Y and D are equal

D.It depends; sometimes Y can be greater, sometimes D can be greater

Modules 2-3

Question 4

1 point possible (graded)

What is the price of the following US T-Bond? (Use any method you prefer)

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