Exam 4: Understanding Interest Rates

The ________ of a coupon bond and the yield to maturity are inversely related.

Which of the following are true for discount bonds?

The present value of an expected future payment ________ as the interest rate increases.

An equal decrease in all bond interest rates

The ________ is defined as the payments to the owner plus the change in a security's value expressed as a fraction of the security's purchase price.

The yield to maturity is ________ than the ________ rate when the bond price is ________ its face value.

For a 3-year simple loan of $10,000 at 10 percent,the amount to be repaid is

The interest rate that describes how well a lender has done in real terms after the fact is called the

The price of a coupon bond and the yield to maturity are ________ related; that is,as the yield to maturity ________,the price of the bond ________.

When the ________ interest rate is low,there are greater incentives to ________ and fewer incentives to ________.

The interest rate that equates the present value of payments received from a debt instrument with its value today is the

The interest rate on a consol equals the

A $1000 face value coupon bond with a $60 coupon payment every year has a coupon rate of

A discount bond selling for $15,000 with a face value of $20,000 in one year has a yield to maturity of

When talking about a coupon bond,face value and ________ mean the same thing.

What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?

The yield to maturity for a discount bond is ________ related to the current bond price.

A fully amortized loan is another name for

All else equal,the ________ the coupon rate on a bond,the ________ the bond's duration.

If you expect the inflation rate to be 12 percent next year and a one-year bond has a yield to maturity of 7 percent,then the real interest rate on this bond is