1. The present value of an investment increases as the opportunity cost rate (interest rate) increases.
a false
b true
2. Which of the following is the yield of a bond that offers a risk-free rate of 4% and a risk premium of 2%?
a 2%
b 8%
c 6%
d 12%
3. Which of the following bonds pays interest based on an inflation index?
a Income bonds
b Purchasing power bonds
c Treasury bills Floating-rate bonds
d Zero coupon bonds