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Author Question: A bond that matures in 5 years has less interest rate risk than a bond that matures in 25 years ... (Read 112 times)

appyboo

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on: Jul 10, 2018
A bond that matures in 5 years has less interest rate risk than a bond that matures in 25 years
  because regardless of changes in interest rates, the bond can be redeemed for face value 20 years
  earlier.
 
  Indicate whether the statement is true or false

Question 2

The internal rate of return is
 
  A) the discount rate that makes NPV negative and the PI greater than one.
  B) the rate of return that makes the NPV positive.
  C) the discount rate that makes the NPV positive.
  D) the discount rate that equates the present value of the cash inflows with the present value of
  the cash outflows.
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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fraziera112

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Reply #1 on: Jul 10, 2018
Answer to Question 1

FALSE

Answer to Question 2

D


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appyboo

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Reply #2 on: Jul 10, 2018
Thank you :)


fraziera112

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Reply #3 on: Jul 10, 2018
Happy to help you


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