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5 obj questions please How much would an investor lose the first year if she purchased a 30-year zero-coupon bond with a $1,000 par value
5 obj questions please
How much would an investor lose the first year if she purchased a 30-year zero-coupon bond with a $1,000 par value and a 10% yield to maturity, only to see market interest rates increase to 12% one year later? of Select one: a. $20.00 O b. $19.93 O c. $25.66 d. $23.93 An investor holds two bonds, one with 5 years until maturity and the other with 20 years until maturity. Which of the following is more likely if interest rates suddenly increase by 2%? t of Select one: a. the 5-year bond will decrease more in price. b. the 20-year bond will decrease more in price. c. both bonds will decrease in price similarly. d. neither bond will decrease in price, but their yields will increase. estion 11 What is the expected real rate of interest for an account that offers a 12% nominal rate of return when the rate of inflation is 6% annually? t yet swered Select one: arked out of 00 a. 6.00% Flag question b. 5.00% c. 5.66% d. 9.46% Question 12 Not yet answered What happens to the coupon rate of a $1,000 face value bond that pays $80 annually in interest if market interest rates change from 9% to 10%? Marked out of 1.00 Select one: a. the coupon rate remains at 8%. P Flag question b. the coupon rate decreases to 8% c. the coupon rate increases to 10% d. the coupon rate remains at 9%. 3 Would you prefer a savings account that paid 7% interest compounded quarterly, 6.8% compounded monthly, 7.2% compounded weekly, or an account that paid 7.5% with annual compounding? t of Select one: a. 7.2% compounded weekly b. 7% compounded quarterly c. 6.8% compounded monthly d. 7.5% compounded annuallyStep by Step Solution
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