(it deleted the line but visualize the yield curve, downward sloping from 7% down to 5% over 5 years.

41. (6 points) Given the following yield curve, calculate:

Yield 7.0%

_ti₁ = 7.0% 6.25%

_ti₂ = 6.25% 6% 5.75%

_ti₃ = 6.0% 5%

_ti₄ = 5.75%

_ti₅ =5.0%

1 2 3 4 5

Maturity

The rate on a four year bond you purchase one year from today is:

		7.8%
		5.2%
		3.75%
		4.51%

Option sellers (writers) can only lose the option premium.

True

False

The coupon rate times the market value of the bond indicates the fixed interest payments of a fixed-income debt security.

True

False