Question 1 A credit card account that charges interest at the rate of 1.25% per month would have an effective annual rate (EAR) of and an annual percentage rate (APR) of (a) 16.00, 15.00% (b) 14.55%, 16.08% (12.6%, 15.00% (d15.00K, 14.55% Question 2 What is the current yield of a bond with a 6 coupon, four years until maturity, and a price of $7507 (a) 6.0% IRON ( 12.0% (d) 14.7% Question 3 What real interest rate is offered by a savings account with a 12% nominal rate during a period of 5% inflation? (a) 5.33% 6.66% 107.00 (d) 8.33% Question 4 How much must be invested today in order to receive five annual payments of $1,000, if the first payment is collected two years from today and the interest rate 107 (a) $1,610 51 $1,446.17 153,700.79 (d) $4,545.45 Questions Which of the following is NOT a true statement? (a) Present values and discount rates move in the opposite directions from one another. (6) On monthly compounded loans, the EAR will exceed the APR. Ich Future values increase with increases in interest rates. (d) Allelse equal, the longer the term of a loan the lower will be the total interest you pay on it. Intro la France MOCR 411 Page 3 of Hali