1. In the one-period present-value equation, P = F/(1 + i), the term i is known as
future value
present value
the rate of discount
the discount factor
2. Consider a coupon bond that pays $350 every year and repays its principal amount of $5,000 at the end of four years. If the annual rate of discount is 6 percent, what is the present value of the bond?
$5,173.26
$4,542.33
$6,548,15
$5,534,18