problem1. Which of the following statements is true?
a: the value of a bond is inversely related to alters in investors present required rate of return
b: if interest rates lessen, the value of a bond will decrease
c: if interest rates raise, the value of a bond increase
d: none of the above
problem2. For a given stated interested rate, an investor would get a greater future value with daily compounding as opposed to monthly compounding. True or false
problem3. One characteristic of an annuity is that the payment amount is the same throughout every period. True or false
problem4. As market rates of interest rise, investors move their funds in bonds, hence raising their price and low their yield. True or false
problem5. The total amount of interest earned on the lump sum investment will exactly double if the amount of time is exactly doubled, everything else equivalent. True or false