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11. Yield to maturity interest rates and spot interest rates are the same
T/F
12. BVAL Rates are yield to maturity interest rates
T/F
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- What is expectations theory of the term structure of interest rates? Group of answer choices a. Long term interest is equal to average short-term interest rates. b. Average rates is the term of structure of interest rates. c. Short-term interest is equal to long-term interest rates. d. Long term interest is the sum of all short-term interest rates.which one is correct please confirm? QUESTION 27 The term structure of interest rates is related to the ____ risk premium. a. seniority b. marketability c. default d. maturity8.What is imputed interest? a. Interest based on the stated interest rate b. Interest based on the implicit interest rate c. Interest based on the average interest rate d. Interest based on the coupon rate
- 1. What is the most accurate measure of interest rates? a) Current Yield b) Nominal Interest Rate c) Simple Interest Rate d) Yield to MaturityK Bonds are priced in the market so that their A. stated rate B. yield OC. discount OD. par value is the same as the market rate of interest.j. If interest rates increase after a bond issue, the yield-to-maturity will ______,
- A. Assume that the variables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? FV = (1 + I)NN / PV FV = PV / (1 + I)NN FV = PV x (1 + I)NN B. Simple interest? FV = PV + (PV x I x N) FV = PV - (PV x I x N) FV = PV / (PV x I x N) C. Identify whether the following statements about the simple and compound interest methods are true or false. Statement True False After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound…The following figures illustrate which theory concerning interest rates? Yield to Maturity Time to Maturity Multiple Choice Yield to Maturity O liquidity premium theory O expectations hypotnesis Time to Maturity O term structure of interest rates risk structure of Interest rates Yield to Maturity Time to Maturity5. Solve for the following assuming that uncovered interest rate parity holds. a. is = .03, ie -.02 What is %AEse? a. Ese = 2, is=.03, ie -.02 What is E? b. E° = 4, is = .03, ie -3.05 What is Ese ?
- 10. The bond interest expense reflected on the income statement should reflect an amount based on the a. effective interest rateb. stated interest ratec. nominal interest rated. face interest rateBriefly explain how each of the factors below influence interest rates: A. Inflation B. Term to maturity C. Exchange rateThe elasticity of the change of the price of debt toward the change in interest rate is the absolute value of (and then divided by(1+r)) a. Convexity b. Maturity c. Duration d. Immunization