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1. ( T or F ) Normally, investors had better sell bonds when interest rates are relatively high. 2. ( T or F ) Other

1. ( T or F ) Normally, investors had better sell bonds when interest rates are relatively high.

2. ( T or F ) Other things being the same, the higher the risk of a stock, the higher the price of the stock.

3. ( T or F ) If two bonds have the same price, you should always expect their coupon rates are the same.

4. You have just been notified that you won the lottery. You will be paid 10 annual payments of $1,000,000, with the first one starting today. Using an interest rate of 9% (annual compounding), how much did you really win (what is the present value)?

a. $6,995,246.89 b. $7,246,887.91 c. $7,515,232.25 d. $10,000,000.00

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