1) You have kept $10,000 toward the down payment on home. The money is invested in the account earning 7% interest. You will be ready to buy new home once your saving account increases to 25 thousand.
i) Around how many years it will take for account to reach $25,000?
ii) If interest rate doubles to 14% find the number of years that will pass before you reach your $25,000 target?
2) If yield curve is normal or upward sloping, short-term rates are higher than longer-term rates.
i) True
ii) False
3) If market rate of interest on the bond is less than bond's coupon rate bond's present market price will be less than par (face).
i) true
ii) false