ECON 2302 Chapter 32 Quiz
Suppose Regis has a 25 percent chance of not collecting $1,000 in one year. If the interest rate is 10 percent, what is the expected value of the future payment?
$682
An institution that makes savings available to investors is known as
A financial intermediary
Par value is the
Face value of a bond.
The price of a stock will increase, ceteris paribus, when
Future earnings expectations increase
Figure 32.1 represents the market for loanable funds. The equilibrium interest rate
Represents the price paid for the use of money.
Suppose a company's bond sold for $100 last month and this month the price is $90. The annual interest payment is $18. The current yield on this bond is
20 percent.
The first sale to the general public of stock in a corporation is referred to as
An initial public offering.
Potential investors expect to be compensated for additional risk by above-average interest rates.
True
The lower the cost of funds, the greater the amount of loanable funds demanded.
True
Present discounted value refers to the
Value today of future payments adjusted for interest accrual.