Quizific | Simple Interest Rate Quiz

_______________ are thise loans that requires the borrower to make the same payment every period until the maturity date.

Simple loan

Fixed-payment loan

Discount loan

Same-payment loan

A coupon bond pays the owner of the bond _____________ and repays the face value at the maturity date`

the same amount every month until maturity date

a fixed interest payment every period

the face value of the bond plus an interest payment once the maturity date has been reached

None of the above

____________ refers to a bond’s future payments.

Cash flows

Maturity values

Discounted present values

Yields to maturity

A credit market instrument that pays the owner the face value of the security at the maturity date and nothing prior to then is called a ________________.

Simple loan

Fixed-payment loan

Coupon bond

Discount bond

Which of the following are generally true for of types of bonds?

Longer a bond’s maturity indicates lower rate of return as a result of the increase in an interest rate

Even though a bond has a substantial initial interest rate, its return can turn out to be negative if interest rates rise

Prices and returns for long-term bonds are more volatile than those for shorter-term bonds

All of the above hold true

The process of calculating amount received in the future are worth today is called _________

deflation

discounting

inflation

All of the above

Interest rate that equates the present value of the cash flow received from a debt instrument with its market price today is called ____________.

simple interest rate

discount rate

yield to maturity

real interest rate

___________ is the interest rate that financial economists consider to be the most accurate measure.

Current yield

Yield to maturity

Yield on a discount basis

Coupon rate

The simple interest rate equals the ____________ for a simple loan.

real interest rate

nominal interest rate

current yield

yield to maturity

For simple loans, the simple interest rate is _________ the yield to maturity.

greater than

less than

equal to

not comparable to