1. if a bond sells at a premium, its price will still be greater than par value at maturity.

True

False

2.Suppose the US.Treasury offers to sell you a bond for $687.25.No payments will be made until the bond matures 5 year from now, at which time it will be redeemed for $1,000. what interest rate would you earn if you bought this bond at the office price?

a.6.39%

b.7.24%

c.6.00%

d.8.96%

e.7.79%

3. The benefits of compounding . compared to simple interest. comes from the reinvestment of interest earned in previous periods.

Ture

False