30. You earned a 21.00% return last year. For the same time period, inflation was 1.90%. What was the real return on this investment?

a. 18.74%

b. 19.10%

c. 20.61%

d. Nothing very similar to the above possible responses

31. What is the current yield of a bond with a 9.2% coupon, 5 years until maturity, and a price of $1020?

a. 4.51%

b. 4.60%

c. 9.02%

d. 9.20%

32. You are trying to price a zero-coupon bond. What type of rate will you use to value the bond independently of the bonds current market price?

a. The bonds yield-to-maturity.

b. Spot rate.

c. Forward rate.

d. Coupon rate.

33. Which of the following is a true statement about municipal bonds?

a. Municipal bonds are practically default-risk free

b. Coupon payments from municipal bonds may have reduced taxes

c. General obligation bonds are backed by a specific project

d. Revenue bonds require taxpayer approval

34. A bank with a CAMELS 3, 4, or 5 score:

a. Has the Federal Reserve as its primary regulator

b. Will keep that CAMELS score for the next five years

c. Will have a higher deposit insurance premium

d. Will not need Prompt Corrective Action

35. Which of the following statements is NOT true?

a. Primary mortgages are owned by one investor; bond issues are owned by many investors

b. Mortgages are usually issued by individuals or small companies; bonds are issued by large companies

c. Mortgage holders have a claim to a specific asset; bondholders have a general claim to the firm

d. Mortgages and bonds are both issued in increments of $1,000