1. Your bank account pays 8 % rate of interest. The interest is compounded quarterely. Which of the following statements is correct?

The periodic rate of interest is 25 and the effective rate of interest is 4%

The periodic rate of interest is 8% and the effective rate of interest is greater than 8%

The periodic rate of interest is 4% and the effective of interest is less than 8%

The periodic rate of interest is 2% and the effective rate of interest is greater than 8%

The periodic rate of interest is 8% and the effective rate od interest is also 8%

2.Whaich is the following statement is correct

The cash flows for an ordinary for deferred annuity all occur at the beginning of the periods .

If a series of unequal cash flows occur at regular intervals, such as once per year, then the series is by definition an annuity

The cash flows for annuity must all be equal and they must occur at regular intervals such as once a year or once a month

If some cah flows occur at the beginning of the periods while other occur at the ends then we have what id defined a variable annuity

3. A 15 year bond with a face value of 1000 currently sells for 850. which of the following statements is correct?

The bond coupon rate exceeds its current yield

the bond current yield exceed its yield to maturity

the bond yield to maturity is greater than its coupon rate

If the yield to maturity stays constant until the bond matures, the bond price will remain at 850

4. which OF THE FOLLOWING EVENTS WOULD AMKE IT MORE LIKELY THAT A COMPANY WOULD CHOOSE TO CALL ITS OUTSTANDING CALLABLE BONDS?

the company's bonds are down graded

Market interest rate rise sharply

market interest rates decline sharply

the company financial situation deteriorated significantly

Inflation increases significantly