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Econ 3003 Midtera 2 Fall 2017 Part 1 (25') . The concept of less valuable to you thana A) present value B) future value is based on the C) interest D) deflation 2. The A) falls B) rises D) is unaffected maturity date is known as a A) simple loan B) D) diseoune bond mean the sane thing. A) par value )coupon value C) amortiaed value D) discount value 6 An S8,000 coupon bond with a $400 coupos payment every year has a coupon rate of A) 5 percest B)&percent D) 40 percent C) 10 percent. of 7 perceet, then the real interest rate os this bond is A) 7 perce B) 22 peroent C)-15 percent D)-8 percen. A) increases decreases B) decreases, decreases C) decreases: increases D) semains constant 0. The demand curve for bonds has the ussal dowaward slope, indicating that at boad, everything else equal, the prices of the A) higher, demand B) higher; quantity demanded C)lower, demand D) lower, quantity demanded II. If you expect the inflation rate to be 15 percent next year and a one year bond has a yield to matrity of 7 percent, then the real interest rate on this bond is A) 7 percent B) 22 percent C)-15 percenm D)-8 percent. that corporate bonds have a higher defaut risk and are A) less liquid than B) less speculative than C tax-exempt unlike U.S. Treasury bonds D) lower-yielding than

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