1. What is the concept of present value? What is discounting?

2. Analyze the risk profiles of short-term bonds and long-term bonds during economic instability and fluctuating interest rates.

3. What is the yield to maturity? Why it is considered as a good measure of interest rates?

4. Calculate the present value of a $1,000 zero-coupon bond with six years to maturity if the yield to maturity is 7%

5. Property investment constitutes a large and long- term commitment to an individual. Describe the outcome of taking a property loan during fluctuating interest rates.

6. A lottery claims its grand prize is $20 million, payable over 40 years at $500,000 per year. If the first payment is made immediately, what is the grand prize worth? Use an interest rate of 12%.

7. What are the determinants for an average investor when facing a choice of investing in either properties or shares?

8. Explain the relationship between risk-loving and risk- averse investors, and the strategy of diversification.