Question $1$

A three$-$year bond with a $2\%$ coupon is trading at a YTM of $3\%.$ What is the Macaulay duration?

a$)3$ years

b$)2\mathrm{.}94$ years

c$)3\%$

d$)2\mathrm{.}94\%$

e$)2\%$

Question $2$

Which of the following statements is true?

I. An annuity is an asset that pays a defined sum each year for a specified number of years.

II$.$ The value of a five$-$year annuity is equal to the sum of the values of two perpetuities: one with its first payment in year $1,$ the other with its first payment in year $5$

a$)1$

b$)$ II

c$)$ I and II

d$)$ Neither

Question $3$

Which of the following statements is true?

I. The internal rate of return is the discount rate that makes the NPV of a project's cashflows equal to zero.

II$.$ There can never be more than one value of IRR for any given set of cash flows

a$)1$

b$)$ II

c$)$ I and II

d$)$ Neither

Question $4$

Which of the following statements are true?

I. The payback period calculates present values using the RRR

II$.$ The payback period ignores cashflows which take place after the end of the payback period

a$)1$

b$)$ II

c$)$ I and II

d$)$ Neither