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4) Assume that you receive $10,000 in 5 years. Presently, what is the value if the interest rate is 3.70% and we assume continuous discounting.
4) Assume that you receive $10,000 in 5 years. Presently, what is the value if the interest rate is 3.70% and we assume continuous discounting. a) $9,780 b) $8,395 c) $9,380 None of the above 5) If a person has an expectation that interest rates are going to go up by 50 basis points. down. Please select the correct terms that describes this activity in the bond market. a) Speculating because bond prices will go down b) Hedging because bond prices might go up c) Arbitraging because bond prices will go down. d) None of the above 10) The coupon rate is 5.00% with annual payments, 15 years to maturity, price of $1,080, and face value of $1,000. What is the approximate yield to maturity? a) 5.35% b) 4.30% c) 4.55% d) None of the above
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