1. If you buy a share or stock of Hiber Sugar Factory which is offered to establish a

new sugar factory, to which type/s of finical market instruments you categorize this

stock?

2. A Bond sold by the Ethiopian Electric Power Corporations to the Ethiopian in

Diaspora for financing the new power projects can be categorized as which of the

financial markets discussed in this section?

Discussion Questions

3. Would a dollar tomorrow be worth more to you today when the interest rate is

20% or when it is 10%?

4. If the interest rate is 10%, what is the present value of a security that pays you Br.

1,100 next year, Br. 1,210 the year after, and Br. 1,331 the year after that?

5. What is the yield to maturity on a simple loan for Br 1 million that requires a

repayment of Br 2 million in five years' time?