1) A perpetuity of $50,000 per year beginning next year offers a 10% internet rate. What is its present value?

a) $50,000

b)$50,0000

c)$500,000

3) The term structure of interest rates is depicted in the

1. Maturity graph
2. Yield curve
3. Default premium
4. Interest rate risk graph

d)$5,000,000

2) If you have a loan with a 24% internet rate this past year and inflation was at 14%, what was the real rate of interest, you paid on the loan using the approximation formula?

a) 2%

b)10%

c)12%

d)22%