Question
Nominal interest rate represents the growth factor of purchasing power. True False As the maturity of the loan increases, the interest rate quoted on that
Nominal interest rate represents the growth factor of purchasing power.
True
False
As the maturity of the loan increases, the interest rate quoted on that loan increases because of the increase in maturity premium.
True
False
Which of the following is correct for the company's bond price when the default risk of that company increases (when the future prospect of the company becomes poor)?
| YTM increases therefore the price of the bond increases | ||
| YTM decreases therefore the price of the bond decreases | ||
| YTM decreases therefore the price of the bond increases | ||
| YTM increases therefore the price of the bond decreases |
Which of the following is correct for the relationship between bond prices and interest rates?
| Bond prices and interest rates are directly related. This means that when interest rates go up, the bond prices go up as well, | ||
| Bond prices and interest rates are not related at all. | ||
| Bond prices and interest rates are inversely related. This means that when interest rates go up, bond prices go down. | ||
| None |
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Unlock Financial Success With Self Storage Wealth Strategies
Authors: Ethan D. Costa
1st Edition
979-8866108695
