.1-An investment or loan that has an interest rate of 6 percent compounded annually also has an equivalent effective interest rate of 6 percent. a. True b. False

2- Studies show that stocks with high dividend yields and low P/E ratios earn excess returns. a. True b. False

3- The existence of a downward-sloping yield curve is inconsistent with the liquidity preference theory. a. True b. False .

4- The promised yield on corporate bonds will in general be higher than the expected yield. a. True b. False