1. What happens to the price of a bond with a 5% coupon rate if interest rates for similar bonds go up to 8%?
a. The price decreases because 5% is less than 8%.
b. The price decreases because the present value of future payments falls.
c. The price increases because 8% is more than 5%.
d. The price increases because the present value of future payments rises.
2. Which of the following is not a common result of a company choosing to use LIFO rather than FIFO?
A. Higher Profit margins
B. Higher Price Earnings Ratios
C. Higher cost of goods sold
D. Higher Total Asset Turnover