1. If the quoted annual interest rate is 6% with monthly compounding, what is the effective annual rate?
6%
6.09%
6.168%
6.184%
2. A zero-coupon bond costs $67,032 today with face value $100,000 mature in 5 years, what is the continuously compounded rate of return?
6%
8%
8.12%
9.84%
3. A zero-coupon bond costs $67,032 today and pays $100,000 at maturity, and has a continuously compounding annual return of 10%. In how many years does it mature?
4
4.5
4.8
5
4. An investment of $5 today pays a continuously compounded rate of 7.5% per year. How much money will you have in 7 years?
$8.05
$8.12
$8.30
$8.45
5. Using continous compounding rate of 5%, what is the present value of $100 you are to receive in 3 years?
$1,16.18
$95.24
$86.38
$86.07
6. For a quoted annual rate of 8% with monthly compounding, what is its equivalent rate with continuous compounding?
7.10%
7.97%
8.30%
8.55%
7. You take a loan with continuous compounding rate of 6.87% but interest paid semi-annually. If you take a $ 100,000 loan. What is your semi-annual interest payment?
$1732.33
$3435.00
$3494.68
$7111.48
8. A treasury bill matures in 3 months with a face value of $1000. If the continously compounded market interst rate is 1.25%, what is its price?
$987.60
$987.65
$987.58