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FIN 370 - FIN 370 Final Exam Questions & Answers at UOP E Tutors

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Mutual funds<br />

Secondary markets<br />

26) Which of the following is a true st<strong>at</strong>ement?<br />

If interest r<strong>at</strong>es fall, U.S. Treasury bonds will have decreasing values.<br />

If interest r<strong>at</strong>es fall, no bonds will enjoy rising values.<br />

If interest r<strong>at</strong>es fall, corpor<strong>at</strong>e bonds will have decreasing values.<br />

If interest r<strong>at</strong>es fall, all bonds will enjoy rising values.<br />

27) Five years ago, Jane invested $5,000 and locked in an 8 percent<br />

annual interest r<strong>at</strong>e for 25 years (ending 20 years from now). James can<br />

make a 20-year investment today and lock in a 10 percent interest r<strong>at</strong>e.<br />

How much money should he invest now in order to have the same<br />

amount of money in 20 years as Jane?<br />

$7,346.64<br />

$3,160.43<br />

$5,089.91<br />

$3,464.11<br />

28) We call the process of earning interest on both the original<br />

deposit and on the earlier interest payments:<br />

compounding.<br />

multiplying.<br />

computing.<br />

discounting.

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