Reference no: EM131499659
1. The _________ is defined as the specified date on which the principal amount of a bond is payable.
clean date
yield date
coupon date
maturity
dirty date
2. Which one of the following statements is correct?
Most loans are a form of a perpetuity.
Perpetuities are finite but annuities are not.
A perpetuity comprised of $200 monthly payments is worth less than an annuity comprised of $200 monthly payments, given an interest rate of 10 percent, compounded monthly.
The present value of a perpetuity cannot be computed, but the future value can.
An ordinary annuity is worth less than an annuity due given equal annual cash flows for 5 years at 5 percent interest, compounded annually.
3. Which of the following statements indicates the correct relationship between present value and future value interest factors?
The future value factor is the exponent of the present value factor.
The present value factor is the exponent of the future value factor.
The present value and future value factors are equal to each other.
The factors are reciprocals of each other.
There is no relationship between these two factors.