Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 4 The Meaning of Interest Rates
4.1 Measuring Interest Rates
1) The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today. A) present value B) future value C) interest D) deflation Answer: A
AACSB: Application of Knowledge
2) The present value of an expected future payment ________ as the interest rate increases. A) falls B) rises
C) is constant D) is unaffected Answer: A
AACSB: Reflective Thinking
3) An increase in the time to the promised future payment ________ the present value of the payment. A) decreases B) increases
C) has no effect on D) is irrelevant to Answer: A
AACSB: Reflective Thinking
4) With an interest rate of 6 percent, the present value of $100 next year is approximately A) $106. B) $100. C) $94. D) $92. Answer: C
AACSB: Analytical Thinking
5) What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent? A) $453.51 B) $500.00 C) $476.25 D) $550.00 Answer: A
AACSB: Analytical Thinking
6) If a security pays $55 in one year and $133 in three years, its present value is $150 if the interest rate is
A) 5 percent. B) 10 percent. C) 12.5 percent. D) 15 percent. Answer: B
AACSB: Analytical Thinking
7) To claim that a lottery winner who is to receive $1 million per year for twenty years has won $20 million ignores the process of A) face value. B) par value. C) deflation.
D) discounting the future. Answer: D
AACSB: Analytical Thinking
8) A credit market instrument that provides the borrower with an amount of funds that must be repaid at the maturity date along with an interest payment is known as a A) simple loan.
B) fixed-payment loan. C) coupon bond. D) discount bond. Answer: A
AACSB: Application of Knowledge
9) A credit market instrument that requires the borrower to make the same payment every period until the maturity date is known as a A) simple loan.
B) fixed-payment loan. C) coupon bond. D) discount bond. Answer: B
AACSB: Application of Knowledge
10) Which of the following are TRUE of fixed payment loans?
A) The borrower repays both the principal and interest at the maturity date. B) Installment loans and mortgages are frequently of the fixed payment type. C) The borrower pays interest periodically and the principal at the maturity date. D) Commercial loans to businesses are often of this type. Answer: B
AACSB: Reflective Thinking
11) A fully amortized loan is another name for A) a simple loan.
B) a fixed-payment loan. C) a commercial loan. D) an unsecured loan. Answer: B
AACSB: Application of Knowledge
12) A credit market instrument that pays the owner a fixed coupon payment every year until the maturity date and then repays the face value is called a A) simple loan.
B) fixed-payment loan. C) coupon bond. D) discount bond. Answer: C
AACSB: Application of Knowledge
13) A ________ pays the owner a fixed coupon payment every year until the maturity date, when the ________ value is repaid. A) coupon bond; discount B) discount bond; discount C) coupon bond; face D) discount bond; face Answer: C
AACSB: Analytical Thinking
14) The ________ is the final amount that will be paid to the holder of a coupon bond. A) discount value B) coupon value C) face value D) present value Answer: C
AACSB: Application of Knowledge
15) When talking about a coupon bond, face value and ________ mean the same thing. A) par value B) coupon value C) amortized value D) discount value Answer: A
AACSB: Application of Knowledge
16) The dollar amount of the yearly coupon payment expressed as a percentage of the face value of the bond is called the bond's A) coupon rate. B) maturity rate. C) face value rate. D) payment rate. Answer: A
AACSB: Application of Knowledge
17) The ________ is calculated by multiplying the coupon rate times the par value of the bond. A) present value B) face value
C) coupon payment D) maturity payment Answer: C
AACSB: Analytical Thinking
18) If a $1000 face value coupon bond has a coupon rate of 3.75 percent, then the coupon payment every year is A) $37.50. B) $3.75. C) $375.00. D) $13.75 Answer: A
AACSB: Analytical Thinking
19) If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is A) $650. B) $1,300. C) $130. D) $13.
Answer: A
AACSB: Analytical Thinking
20) An $8,000 coupon bond with a $400 coupon payment every year has a coupon rate of A) 5 percent. B) 8 percent. C) 10 percent. D) 40 percent. Answer: A
AACSB: Analytical Thinking
21) A $1000 face value coupon bond with a $60 coupon payment every year has a coupon rate of A) .6 percent. B) 5 percent. C) 6 percent. D) 10 percent. Answer: C
AACSB: Analytical Thinking
22) All of the following are examples of coupon bonds EXCEPT A) corporate bonds. B) U.S. Treasury bills. C) U.S. Treasury notes. D) U.S. Treasury bonds. Answer: B
AACSB: Analytical Thinking
23) A bond that is bought at a price below its face value and the face value is repaid at a maturity date is called a A) simple loan.
B) fixed-payment loan. C) coupon bond. D) discount bond. Answer: D
AACSB: Application of Knowledge
24) A ________ is bought at a price below its face value, and the ________ value is repaid at the maturity date.
A) coupon bond; discount B) discount bond; discount C) coupon bond; face D) discount bond; face Answer: D
AACSB: Analytical Thinking
25) A discount bond
A) pays the bondholder a fixed amount every period and the face value at maturity. B) pays the bondholder the face value at maturity. C) pays all interest and the face value at maturity.
D) pays the face value at maturity plus any capital gain. Answer: B
AACSB: Reflective Thinking
米什金 货币金融学 英文版习题答案chapter 4英文习题
