Determining the present value

Reference no: EM1370978

1)The term structure of interest rates may be represented graphically using :
a. a yield curve
b. an indifference curve
c. a yield profile
d. a yield spread

2)You have just won a lottery! You will receive $50,000 a year beginning one year from now for twenty years. If your required rate of return is 10 percent, what is the present value of your winning lottery ticket?
a. $418,250
b. $425,700
c. $444,640
d. $453,850

3)What would be the future value of a loan of $1,000 for two years if the bank offered a 10% interest rate compounded semiannually?
a. $1,720
b. $1,960
c. $1,200
d. $1,216

Reference no: EM1370978

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