Question
Which one of the following is FALSE? Select one: a.The credit spread of a bond increases if it is perceived that the probability of the
Which one of the following is FALSE?
Select one:
a.The credit spread of a bond increases if it is perceived that the probability of the issuer defaulting increases.
b.The longer time to maturity, the higher interest rate risk.
c.As bond rating improves, the yield to maturity increases.
d.The higher coupon rate, the lower interest rate risk.
Clear my choice
Question14
Menik can save $5,000 per year. If interest rates are 12%, how long will it take her savings to grow to $60,000?
Select one:
a.11.38 years
b.7.87 years
c.9.22 years
d.4.254 years
Clear my choice
Question15
Assume that your superannuation fund promises you $50,000 per year starting when you retire 40 years from today (the first $50,000 will come 40 years from now). If your discount rate is 7%, compounded annually, and you assume you will live for 15 years after retiring (so that you will get a total of 16 payments including the first one), what is the value of the superannuation fund's promise today?
Select one:
a.$33,750.52
b.$472,332.43
c.$666,585
d.$31,542.54
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