the economics of money, banking, and financial markets

97 #

© 2014 Pearson Canada Inc.#

41. 
    

    A coupon bond that has no maturity date and no repayment of principal is called a ____.
    A) consol
    B) cabinet
    C) Treasury bill
    D) Government note
    Answer: A
    Diff: 1 Type: MC Page Ref: 70
    Skill: Recall
    Objective List: 4.1 Understand how interest rates are measured

    
    


42. 
    

    The price of a consol equals the coupon payment ____.
    A) times the interest rate
    B) plus the interest rate
    C) minus the interest rate
    D) divided by the interest rate
    Answer: D
    Diff: 1 Type: MC Page Ref: 71
    Skill: Recall
    Objective List: 4.1 Understand how interest rates are measured

    
    


43. 
    

    The interest rate on a consol equals the ____.
    A) price times the coupon payment
    B) price divided by the coupon payment
    C) coupon payment plus the price
    D) coupon payment divided by the price
    Answer: D
    Diff: 1 Type: MC Page Ref: 71
    Skill: Recall
    Objective List: 4.1 Understand how interest rates are measured

    
    


44. 
    

    A consol paying $20 annually when the interest rate is 5 percent has a price of ____.
    A) $100
    B) $200
    C) $400
    D) $800
    Answer: C
    Diff: 2 Type: MC Page Ref: 71
    Skill: Applied
    Objective List: 4.1 Understand how interest rates are measured