10 Ganley Ford offers to sell your company a new Lincoin Navigator at factory list price, (Hybrid conversion kit included) and, of course, outstanding financing. The list price is $40,000 . The special rate is 7.65%. Calculate monthly payments on this 5 year loan. 818.37 812.32 808.22 804.37 11 Currently, the prime rate and federal funds rates are 3.75% ard,5% a b. c. d. 3.5% and 25% 3.2S% and .25% 3% and .01% 12 The real rate of interest is the treasury rate minus the nominal rate is the nominal rate adjusted for inflation is the risk free rate plus the nominal rate b. c. d. 13 Interest rates and inflation in the United States were highest a. around 1980 b. around 1990 c. around 2000 d. around 2010 14 A legal contract that states the rights, privileges, and obligations of the bond issuer b debenture c. samurai bonds 15 Which of the following is best associated with interest rate movernents and inflation? Interest rates move inversely with inflation. b. a. Interest rates vary directly with expected inflation Interest rates lag inflation, or vary directly with past inflation rates. d. c. Inflation is impacted by expected interest rates. 16 If market interest rates fall after a bond is issued, the a. face value of the bond increases. b. investor will sell the bond. c. market value of the bond is increasing d. market value of the bond is decreasing. 17 Currently, the shape of the Treasury Yield Curve appears to be (go to markets.wsj and pull down menu rates a. flat b. downward sloping C, upward sloping d. Inverted 18 As a bond approaches its maturity (page 236) it's price becomes more sensitive to interest rates b, a. it's price becomes less sensitive to interest rates c. it is no longer worth anything 19 Using the Expectations Theory to explain term structure a US Treasury rates would be described as riskier than any other financial assets b. the yield curve would be flat during regular trading hours c. expectations of rising interest rates would be reflected in an dowrward sloping yield curve d. expectations of rising interest rates would be reflected in an upward sloping yield curve 20 A S 1,000,000 bond with a 6% coupon rate has 7 years to maturity, it is seling for S835,750. Calculate the bond's yield to maturity (solve for the bond's interest or required rate...go to YouTube if noeded) a. b. C. d. 6.25% 0.30% 10.29% 13.50%