Author Question: A bond that matures in 5 years has less interest rate risk than a bond that matures in 25 years ... (Read 55 times)

appyboo

  • Hero Member
  • *****
  • Posts: 527
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.


fraziera112

  • Sr. Member
  • ****
  • Posts: 356
Answer to Question 1

FALSE

Answer to Question 2

D



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Did you know?

Since 1988, the CDC has reported a 99% reduction in bacterial meningitis caused by Haemophilus influenzae, due to the introduction of the vaccine against it.

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Famous people who died from poisoning or drug overdose include, Adolf Hitler, Socrates, Juan Ponce de Leon, Marilyn Monroe, Judy Garland, and John Belushi.

For a complete list of videos, visit our video library