1-TIPS are sound investments for part of your retirement funds because you can l

Question

1-TIPS are sound investments for part of your retirement funds because you can lock in a real rate of return even if the annual inflation rate increases above the currently expected annual rate; which should be reflected in the yield on Treasury securities that are not indexed to the rate of inflation

True/False

2-If the yield on a 5 year Treasury Note is 4% and the Yield on TIPS with the same maturity are 2%; it would be correct to conclude that the market is expecting inflation to average 2% per year over the next 5 years

True/False

3-Higher inflation will diminish the real cost of your fixed rate mortgage.???True ?False

4- You plan to retire in 20 years. You have zero savings. You now begin to save $500 per year. The first deposit into the savings account that is going to pay 3% per year is at the end of the first year. You make 20 such deposits. At the end of year 20 you buy an annuity with your accumulated wealth. The annuity pays 6% per year for twenty years on the initial value of the annuity. Your yearly income will be between $11,000 per year and $12,000 per year. ?What will be your yearly income? ???

True /?False

5-You plan to retire in 20 years. You have zero savings. You now begin to invest $500 per year. You expect the return on your investments to be 12% per year. The first investment into the stock market account that is going to pay 12% per year is at the end of the first year. You make 20 such investments. At the end f year 20 you buy an annuity with your accumulated wealth. The annuity pays 6% per year for twenty years on the initial value of the annuity. ?You will need at least $45,000 per year to live in retirement. Your retirement plan is solid and is going to work.? ???

True/ ?False

6-If you have issued a 30 year fixed rate mortgage with an interest rate of 6% and five years later mortgage rates fall to 4% you have the option to refinance your mortgage. This would mean issuing a new 4% mortgage and using the funds to pay off the 6% mortgage. ???True/?False

7- .    Variable rate mortgages offer borrowers lower rates than fixed rate mortgages of the same term but are also riskier for the borrower. ???True/ ?False ??

8- Variable rate mortgages offer borrowers lower rates than fixed rate mortgages of the same term because interest rate risk is shifted from the lender to the borrower. ???True / False

Please do not guess answers. If you are not please dont repost to get a rating or something Please.

Thanks

Explanation / Answer

1)true

2)true

3)false

4)true

5)true

6)false

7)false

8)false

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