True or False

1. A stock is a debt security that promises to make periodic payments for a specific period of time. _____

2. In recent years, financial markets have become more risky. However, only a limited number of tools (such as derivatives) are available to assist in managing this risk. _____

3. An example of direct financing is if you were to lend money to your neighbor. _____

4. A bond's current market value is equal to the present value of the coupon payments plus the present value of the face amount. _____

5. The current yield is the yearly coupon payment divided by the current market price. _____

6. Ceteris Paribus, the greater the interest rate the greater the duration is. _____

7. Bonds with a maturity that is longer than the holding period have no interest-rate risk. _____

8. When the real interest rate is high, there are greater incentives to borrow and fewer incentives to lend. _____