Security will make payments

Assignment Help Financial Management

Reference no: EM131956452

1. A security will make payments of $25 per month for the next 5 years, plus $1000 at maturity. Which of the following is true?

If the price increases from $1,500 to $1,600 then the yield to maturity will increase.

If the price increases from $1,500 to $1,600 then the period rate will be more than the nominal rate

If the price increases from $1,500 to $1,600 then the yield to maturity will decrease.

If the price increases from $1,500 to $1,600 then the effective rate will increase

2. You deposit $300 in a bank account that pays an interest rate of 6%. Which of the following is true?

A higher interest rate will result in a lower future value.

A higher interest rate will require a larger number of periods to reach a future value of $500.

Monthly compounding will result in a higher effective rate than daily compounding.

Quarterly compounding will result in a higher effective rate than semi-annual compounding.

Reference no: EM131956452

Questions Cloud

Duel consumption is the bypass ratio of engine system : A contributing factor to an airplane's duel consumption is the bypass ratio of the engine system.

Capital budgeting-how capital budgeting works in real world : Using the examples of bad investments, what do companies need to understand about how capital budgeting works in the real world?

Management of firm short term assets and liabilities : Working capital management is the management of a firm’s short term assets and liabilities.

What equal-sized annual withdrawals : What equal-sized annual withdrawals can Slim make from the account if the first withdrawal occurs in 2018.

Security will make payments : A security will make payments of $25 per month for the next 5 years, plus $1000 at maturity. Which of the following is true?

What is the reward-to-volatility ratio for portfolio : A risky portfolio has an expected rate of return of 15% and a standard deviation of 20%. What is the reward-to-volatility ratio for the portfolio?

Negatively correlated assets to reduce or diversify risk : Diversification is “combining negatively correlated assets to reduce, or diversify, risk.”

What was the firm operating cash flow or OCF : What was the firm's 2016 operating cash flow, or OCF?

About the relationship between interest rates and bond value : Explain what you learned about the relationship between interest rates and bond value.

User Account

All Pages