True/False: These Oestions are numbered 51-55. Use side 2 of the scantron to ans

Question

True/False: These Oestions are numbered 51-55. Use side 2 of the scantron to answer these guestions. Each question is worth two (2) points. Circle the correct option for each question. 51 (a T (b) F Debentures are unsecured bonds that, in general, only the most creditworthy firms can issue. 52. (a) T (b F Future value of an investment increases as the number of years ef compounding at positive rate of interest declines 53. (a) T (b F An annuity with infinite life is called a perpetuity. 54. Ga T (b F YTM is the annual rate of return earned on a bond purchased on a giv en date and held to maturity. 55. @T (b F You deposit $100 in a savings account and keep it there for 5 years. If the interest rate is zero percent, FV is equal to $100

Explanation / Answer

51. True

Debentures are not supported by any Physical assets. They are generally backed only by Creditworthiness of the issuer.

52. False

Future Value will decline as the number of year declines.

53. True

An annuity with infinite life is called Perpetuity.

54. True

YTM is the rate of return that an investor earns on a security if held upto maturity.

55. True

If there is no interest on any investment than its present value and future value will be the same.

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