20-ycar bonds 3 years ago at a coupon rate of 8.5 percent. The 22) hese bomds currently sell for 91.4 percent of par 2) Bare Trees United issued bonds make aluc, what is the n A) 9.13 percent 8) 9.27 pencent C) 9.53 percent D) 8.98 percemt E) 8.42 percent 2 23) 20, which one ofthe following statements isense concerning the term structure of interest rates? A) Expectations of lower inflation rates in the future tend to lower the slope of the term structure of interest rates The term structure of interest rates ncludes both an inflation premium and an interest rate risk premium. C) The real rate of return has minimal, if any, effect on the slope of the term structure of interest rates Dy The term structure of interest rates and the time to maturity are always directly related. E The interest rate risk premium increases as the time to maturity increases. 2 Amortized loans must have which one of these characteristics over its life? 2A) A) Equal interest payments B) Declining periodic payments c Either equal or unequal principal payments D) Increasing payments E) One lump-sum principal payment 25) Theresa adds Si.500 to her savings account on the first d day of each year. Marcus adds .5 percent 25) S1.500 annual interest. What is the difference in their savi years? A) S12,219.46 B) S12,127.04 202 c) $12.113.33 2,36 D) S12.211.12 to his savings account on the last day of each year. They both earn 6 ngs account balances at the end of 35 04 20S30. 43s rD E) $12,093.38 12763.73)