Which of the following are true of Effective Annual Rates (EAR)? Select all that are true a. The EAR can never be less than APR b. The EAR can never be the same as APR c. The EAR will always be the same or more than APR

d. EAR and APR have no relationship

How much will the coupon payments be of a 25-year $1,000 bond with a 7% coupon rate and quarterly payments ($)? Answer to to decimal places Answer:

Which of the following is true about bonds? Select all that are true a. Their coupon rates are independent from current interest rates b. All bond payments are guaranteed by the Federal Deposit Insurance Corporation (FDIC)

c. Their face value is the amount that is repaid at maturity

d. Face values are usually denominated in standard increments, such as $100 or $1,000

Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.6%, with semiannual payments. Draw the cash flows for the bond on a timeline from the borrower's perspective A. Period 0 1 2 24 25 Cash Flows $28.00 $28.00 $28.00 $1,028.00 B. Period 0 1 49 50 2 1 $28.00 Cash Flows $28.00 $28.00 $1,000 C. Period 0 1 2 24 25 Cash Flows $28.00 $28.00 $28.00 $1,000 D. Period 0 1 2 49 50 Cash Flows $28.00 $28.00 $28.00 $1,028.00