Exam 5: Interest Rates

Use the information for the question(s) below. Two years ago you purchased a new SUV. You financed your SUV for 60 months (with payments made at the end of the month) with a loan at 5.9% APR. Your monthly payments are $617.16 and you have just made your 24th monthly payment on your SUV. -Assuming that you have made all of the first 24 payments on time,then the outstanding principal balance on your SUV loan is closest to:

Use the information for the question(s) below. You are purchasing a new home and need to borrow $250,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.25% APR for a 30-year fixed rate mortgage. The mortgage lender also tells you that if you are willing to pay 2 points, they can offer you a lower rate of 6.0% APR for a 30-year fixed rate mortgage. One point is equal to 1% of the loan value. So if you take the lower rate and pay the points you will need to borrow an additional $5,000 to cover points you are paying the lender. -Assuming you pay the points and borrow from the mortgage lender at 6.00%,then your monthly mortgage payment (with payments made at the end of the month)will be closest to:

If the current inflation rate is 5%,then the nominal rate necessary for you to earn an 8% real interest rate on your investment is closest to:

During the 2007-2009 financial crisis,the U.S.Federal Reserve Bank established "central bank liquidity swaps" with the European Central Bank (ECB)and other major central banks. This involved

Which of the following statements is false?

Which of the following statements is false?

Use the information for the question(s) below. Two years ago you purchased a new SUV. You financed your SUV for 60 months (with payments made at the end of the month) with a loan at 5.9% APR. Your monthly payments are $617.16 and you have just made your 24th monthly payment on your SUV. -Amortizing loans are the loans that have monthly payments and are quoted in terms of ________ with ________ compounding.

In Canada,one of the reasons that the rates of bonds issued by Telus and by provincial governments are different is because of

Use the table for the question(s) below. Suppose the term structure of interest rates is shown below: -What is the shape of the yield curve and what expectations are investors likely to have about future interest rates?