Question
Answer all of these questions with the right question number next to the correct choice (letter). Q1-You purchase a 2-year, zero-coupon bond for $92,500 and
Answer all of these questions with the right question number next to the correct choice (letter).
Q1-You purchase a 2-year, zero-coupon bond for $92,500 and sell it for $100,000 at the end of 2 years. What average APR did you earn on the bond?
A) 8.11%
B) 0.04%
C) 0.08%
D) 4.05%
Q2-How can a U.S. exporter avoid exchange rate risk?
A) Seek to denominate invoices in U.S. dollars
B) Seek to denominate payables in the currency of the off-shore company
C) Seek to denominate invoices in the currency of the off-shore company
D) Seek a loan from an international bank to fund exports
Q5)Why do higher-priced assets bring lower rates of return?
A) The risk on lower-priced assets is higher than on higher-priced assets.
B) The risk on lower-priced assets is lower than on higher-priced assets.
C) There is no relationship between price and rates of return.
D) Higher priced assets bring higher rates of return
Q4)You purchase a 4-year, zero-coupon bond for $80,000 and sell it for $100,000 at the end of 4 years. What average APR did you earn on the bond?
A) 6.25%
B) 0.08%
C) 25.00%
D) 0.04%
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