1.

Which of the following statements is false?

Question 1 options:

	The process of moving a value or cash flow forward in time is known as compounding.
	The effect of earning interest on interest is known as compound interest.
	It is only possible to compare or combine values at the same point in time.
	A dollar in the future is worth more than a dollar today.
	A dollar in the future is worth less than a dollar today.

2.

Which of the following is least likely to be similar between forward markets and futures markets?

Question 2 options:

	They both trade on organized exchanges.
	They both can be cash-settled or deliverable.
	They are priced to have zero value at inception to both parties.

3.

A bond is trading at 85 and does not pay out coupon payments. The YTM on the bond is 10%. What is the maturity of the bond (rounded to the nearest month)?

Question 3 options:

	18
	15
	12
	20

4.

It is only those risks that ________ by holding a large portfolio that determine the ________ required by investors.

Question 4 options:

	can't be eliminated; rate of return
	can be eliminated; rate of return
	can be eliminated; risk premium
	can't be eliminated; risk premium