8.Banks are required to quote rates as __________ but the actual rate is the _________.

a. Simple rate; compound rate.

b. EAR; APR

c. Floating rate; fixed rate

d. APR; EAR

e. Compound rate; simple rat.

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9.All of the following are assumptions in using the dividend growth model EXCEPT one. Which one?

1. Next years dividend is always greater than last years dividend.
2. The company pays dividends.
3. The dividend and the price of the stock grow at the same rate.
4. The rate expected in the marketplace is greater than the growth rate of this stock.
5. All of the following are assumptions used in DGM.

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10. Which of the following is true?

I. There is an inverse relationship between discount rates and present values.

II. There is a parallel relationship between discount rates and future values.

III. There is no relationship between discount rates and present or future values.

a. I only

b. II only

c. III only

d. I and II

e. I, II and III