Author Question: If you could borrow at 9.5 compounded semi-annually or at 9.4 compounded monthly, which would you ... (Read 208 times)

newbem · **on:** Jul 10, 2018

If you could borrow at 9.5 compounded semi-annually or at 9.4 compounded monthly, which would you prefer?

A) 9.5 compounded semi-annually
B) Indifferent
C) 9.4 compounded monthly

Question 2

We assign a very low probability of default to the U.S. Treasury and thus assume that all Treasury bills will be paid in full at maturity and thus have a zero default premium.

Indicate whether the statement is true or false.

efwsefaw · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

A

Answer to Question 2

Answer: TRUE
Explanation: We assign a very, very low probability of default to the U.S. Treasury and thus assume that all Treasury bills will be paid in full at maturity and thus have a ZERO default premium.